2008-10-20 NHRMC Bond ResolutionExhibit
Book ~._. Page z 3
COUNTY OF NEW HANOVER, NORTH CAROLINA
SERIES RESOLUTION
Adopted October 20, 2008
NYC 655374 10
TABLE OF CONTENTS
Page
Preamble ..........................................................................................................................................1
Form of Series 2008 Bonds ..............................................................................................................3
ARTICLE I.
DEFINITIONS
Section 101. Meaning of Words and Terms ..................................................................2
Section 102. Rules of Construction ............................................................................. 13
ARTICLE II.
THE SERIES 2008 BONDS
Section 201. Authority for and Issuance of Series 2008 Bonds .................................. 13
Section 202. Maturity; Modes; Interest Rates and Calculation ................................. 14
Section 203. Payment of Principal of and Interest on the Series 2008 Bonds ........... 14
Section 204. Initial Mode and Interest Rates; Subsequent Modes ............................. 15
Section 205. Determination of Interest Rates During the Daily Mode and the
Weekly Mode .......................................................................................... 15
Section 206. Determination of Term Rate .................................................................. 16
Section 207. Determination of Fixed Rate .................................................................. 16
Section 208. Alternate Rate for Interest Calculation .................................................. 16
Section 209. Change to Auction Mode ....................................................................... 16
Section 210. Changes in Mode ................................................................................... 16
Section 211. Defaulted Interest ................................................................................... 19
Section 212. Temporary Series 2008 Bonds ............................................................... 19
Section 213. Mutilated, Lost, Stolen or Destroyed Bonds .......................................... 20
Section 214. Transfer and Exchange of Series 2008 Bonds; Persons Treated as
Owners ................................................................................................... 20
Section 215. Book-Entry Only System ........................................................................ 21
Section 216. Successor Securities Depository; Transfers Outside Book-Entry
Only System ............................................................................................ 21
Section 217. Payments and Notices to Cede & Co ..................................................... 22
Section 218. Conditions Precedent to Initial Delivery of Series 2008 Bonds ............ 22
Section 219. The Liquidity Facility ............................................................................. 23
Section 220. The Credit Facility ................................................................................. 25
Section 221. Substitute Credit Facility; Delivery of Credit Facility to Replace
Liquidity Facility; Surrender of Credit Facility .................................... 26
Section 222. Rights and Duties Under Credit Facility ............................................... 28
Section 223. Credit Facility Provider Deemed Owner ............................................... 28
Section 224. Subrogation Rights of the Credit Facility Provider ............................... 28
ARTICLE III.
REDEMPTION, TENDER AND PURCHASE OF BONDS
Section 301. Redemption Dates and Prices ................................................................29
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Section 302. Sinking Fund Account; Redemption of Series 2008 Bonds .................... 32
Section 303. Notice of Redemption; Selection of Series 2008 Bonds for
Redemption; and Cancellation .............................................................. 33
Section 304. Optional Tenders of Series 2008 Bonds in the Daily Mode or the
Weekly Mode .......................................................................................... 3 5
Section 305. Mandatory Purchase at End of Interest Period for Term Rate Mode ... 36
Section 306. Mandatory Purchase on Mode Change Date ........................................ 36
Section 307. Mandatory Purchase on Expiration Date, Substitute Liquidity
Facility Date and Substitute Credit Facility Date and Termination
of Liquidity Facility and Credit Facility ................................................ 36
Section 308. Mandatory Purchase at Direction of the Corporation or the Credit
Facility Provider .................................................................................... 37
Section 309. Remarketing of Series 2008 Bonds; Notices .......................................... 37
Section 310. General Provisions Relating to Tenders ................................................ 38
Section 311. The Remarketing Agents ........................................................................ 41
Section 312. Qualifications of Remarketing Agents ................................................... 41
Section 313. The Tender Agent ................................................................................... 42
Section 314. Qualifications of Tender Agent .............................................................. 42
Section 315. Several Capacities ................................................................................. 43
ARTICLE IV.
APPLICATION OF SERIES 2008 BOND PROCEEDS
Section 401. Deposit of Funds .................................................................................... 43
ARTICLE V.
SECURITY; FUNDS AND ACCOUNTS
Section 501. Security for the Series 2008 Bonds ........................................................ 44
Section 502. Establishment of Funds and Accounts ................................................... 44
Section 503. Interest Account ..................................................................................... 44
Section 504. Sinking Fund Account ............................................................................ 45
Section 505. Redemption Fund ................................................................................... 46
Section 506. Project Fund .......................................................................................... 47
Section 507. Payments from Project Fund ................................................................. 47
Section 508. Cost of Project ....................................................................................... 48
Section 509. Requisitions from Project Fund ............................................................. 48
Section 510. Reliance Upon Requisitions ................................................................... 49
Section 511. Completion of the Project and Disposition of Project Fund Balance ... 49
ARTICLE VI.
DEPOSITORIES OF MONEY, SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS
Section 601. Security for Deposits .............................................................................. 49
Section 602. Investment of Money .............................................................................. 50
Section 603. Valuation ................................................................................................ 50
ARTICLE VII.
EVENTS OF DEFAULT
Section 701. Events of Default .................................................................................... 51
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ARTICLE VIII.
THE TRUSTEE
Section 801. Acceptance of Duties by Trustee ............................................................51
Section 802. Indemnification of Trustee ................................................................... ..51
Section 803. Compensation of Trustee ..................................................................... ..52
Section 804. Eligibility of Trustee ............................................................................ ..52
ARTICLE IX.
SUPPLEMENTAL SERIES RESOLUTIONS
Section 901. Procedure for Adoption of Supplemental Series Resolutions .............. ..52
Section 902. Exclusion of Series 2008 Bonds ........................................................... ..52
ARTICLE X.
DEFEASANCE
Section 1001. Cessation of Interest of Holders and Repeal of Series Resolution ...... ..52
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 1101. Manner of Giving Notice ..................................................................... ..53
Section 1102. Trustee, County, Corporation, Credit Facility Provider and Holders
Alone Have Rights Under Series Resolution ....................................... ..55
Section 1103. Effect of Partial Invalidity ................................................................... ..55
Section 1104. Effect of Covenants .............................................................................. ..55
Section 1105. Dealing in Series 2008 Bonds .............................................................. ..55
Section 1106. Approval of Bond Purchase Agreements, Remarketing Agreements,
Credit Facility, Credit Facility Provider Agreement and Fifth
Amendment to Lease Agreement .......................................................... ..55
Section 1107. Approval of Official Statement ............................................................. ..55
Section 1108. Appointment of County Representative and Authorization for Other
Acts ....................................................................................................... ..56
Section 1109. No Recourse Against Commissioners, Directors, Officers or
Employees of County, Corporation or Local Government
Commission .......................................................................................... ..56
Section 1110. Headings .............................................................................................. ..56
Section 1111. Continuing Disclosure ......................................................................... ..56
Section 1112. Arbitrage .............................................................................................. ..57
Section 1113. Tax Covenant ....................................................................................... ..57
Section 1114. Notice to Local Government Commission and Rating Agencies ......... ..57
Section 1115. Provisions Relating to Local Government Commission ...................... ..57
Section 1116. Series Resolution Effective ................................................................... ..57
Exhibit A Form of Series 2008 Bonds ..................................................................... A-1
Exhibit B Auction Rate Procedures ..........................................................................B-1
Exhibit C Form of Requisition .................................................................................C-1
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SERIES RESOLUTION AUTHORIZING AND APPROVING THE ISSUANCE AND
SALE OF $20,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE COUNTY OF
NEW HANOVER, NORTH CAROLINA VARIABLE RATE HOSPITAL REVENUE
BONDS (NEW HANOVER REGIONAL MEDICAL CENTER PROJECT) SERIES 2008A
AND $20,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE COUNTY OF NEW
HANOVER, NORTH CAROLINA VARIABLE RATE HOSPITAL REVENUE BONDS
(NEW HANOVER REGIONAL MEDICAL CENTER PROJECT) SERIES 20088, TO
PROVIDE FUNDS TO ACQUIItE, CONSTRUCT AND EQUIP IMPROVEMENTS TO
THE HEALTH CARE FACII,ITIES OWNED BY THE COUNTY, AND,AUTHORIZING
AND APPROVING THE FORM AND TERMS OF THE OFFICIAL STATEMENT, THE
FIFTH AMENDMENT TO THE LEASE AGREEMENT, A CREDIT FACILITY, THE
REMARKETING AGREEMENTS AND THE BOND PURCHASE AGREEMENT AND
THE EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT, THE FIFTH
AMENDMENT TO THE LEASE AGREEMENT; A CREDIT FACILITY AND THE BOND
PURCHASE AGREEMENT AND THE USE OF THE OFFICIAL STATEMENT IN
CONNECTION WITH THE PUBLIC OFFERING OF SUCH BONDS AND SUCH OTHER
MATTERS RELATED THERETO
RECITALS
WHEREAS, the County of New Hanover, North Carolina (the "County") is a political subdivision of the
State of North Carolina, which owns New Hanover Regional Medical Center, a public general acute-care hospital
facility;
WHEREAS, the County is empowered, under the Constitution and laws of the State of North Carolina,
particularly The State and Local Government Revenue Bond Act, Article 5, Chapter 159 of the General Statutes of
North Carolina, as amended (herein called the "Act"), to undertake the obligations and commitments on its part set
forth herein;
WHEREAS, the Board of Commissioners of the County (the "Board") adopted a Bond Order on October 6,
1993, as amended by the First Supplemental Bond Order adopted by the Board on February 5, 1999 and the Second
Supplemental Bond Order adopted by the Board on December 7, 2005 (collectively, the "Bond Order"), authorizing
the issuance of hospital revenue bonds;
WHEREAS, the County proposes to undertake the acquisition, construction and equipping of certain
improvements to the Existing Facilities, including (i) the additional construction to the surgery pavilion and related
facilities, (ii) the additional construction to the women's and children's pavilion and related facilities and (iii) the
acquisition and installation of information system equipment and other operating equipment (collectively, the
"Project");
WHEREAS, the County has determined that the issuance of the Series 2008A Bonds and the Series 20088
Bonds (collectively, the "Series 2008 Bonds") is in the best interest of the County; and
WHEREAS, the County has determined that the Series 2008 Bonds, the Certificate of the Local
Government Commission and the Certificate of Authentication to be endorsed by the Trustee on all Series 2008
Bonds as provided herein shall be, respectively, substantially in the forms, with such variations, omissions and
insertions as may be specified by the County or otherwise required or permitted by this Series Resolution, attached
hereto as Exhibit A; now therefore,
BE IT RESOLVED by the Board of Commissioners of the County of New Hanover, North Carolina:
ARTICLE I.
DEFII~lITIONS
Section 101. Meaning of Words and Terms. Unless otherwise required by the context, words and
terms used herein which are defined in the Bond Order and Exhibit B to this Series Resolution shall have the
meanings assigned to them therein, except as hereinafter set forth:
"Affiliate" means a corporation, limited liability company, partnership, joint venture, association, business
trust or similar entity (i) which controls, is controlled by or is under common control with, directly or indirectly, a
Person; or (ii) a majority of the members of the governing body of which are members of the governing body of a
Person. For the purposes of this defmition, control means with respect to: (a) a corporation having stock, the
ownership, directly or indirectly, of more than 50% of the securities (as defined in Section 2(1) of the Securities Act
of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the governing body of such corporation; (b) anon-profit corporation not having stock,
having the power to elect or appoint, directly or indirectly, a majority of the members of the governing body of such
corporation; or (c) any other entity, the power to direct the management of such entity through the ownership of at
least a majority of its voting securities or the right to designate or elect at least a majority of the members of its
governing body, by contract or otherwise. For the purposes of this defmition, "governing body" means with respect
to: (a) a corporation having stock, such corporation's board of directors and the owners, directly or indirectly, of
more than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933, as amended) of any class
or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the
corporation's directors (both of which groups shall be considered a governing body); (b) anon-profit corporation not
having stock, such corporation's members if the members have complete discretion to elect the corporation's
directors, or the corporation's directors if the corporation's members do not have such discretion or if such
corporation has no members; and (c) any other entity, its governing board or body. For the purposes of this
definition, all references to directors and members shall be deemed to include all entities performing the function of
directors or members however denominated.
"Alternate Rate" means with respect to Series 2008 Bonds bearing interest in a Daily Mode or a Weekly
Mode for an Interest Period of 30 days or less, an annual rate equal to the SIFMA Municipal Swap Index,
announced or published immediately prior to the date such Alternate Rate is determined; and with respect to Series
2008 Bonds bearing interest in a Term Rate Mode, an annual rate equal to 75% of the highest quoted yield on
United States Government Obligations -State and Local Government Series, with a maturity equal to the length of
the Interest Period for which the Alternate Rate is calculated, which yield was published in Form PD4262,
Department of Treasury, Bureau of Public Debt, as most recently published prior to the date such Alternate Rate is
determined.
"Alternate Redemption Price" shall have the meaning specified in Section 301(B)(2) hereof.
"Auction Agenf' has the meaning set forth in Exhibit B hereto.
"Auction Mode" means the Mode during which Series 2008 Bonds bear interest at the Auction Period Rate
(as defined in Exhibit B hereto).
`Authorized Denomination" means denominations of (i) $25,000 and any integral multiple thereof with
respect to Series 2008 Bonds in an Auction Mode, (ii) $100,000 and any integral multiple of $5,000 in excess
thereof with respect to Series 2008 Bonds in the Daily Mode or the Weekly Mode and (iii) $5,000 and any integral
multiple thereof if the Series 2008 Bonds are rated Investment Grade by at least one Rating Agency and otherwise
$100,000 and any integral multiple of $5,000 in excess of $100,000, with respect to Series 2008 Bonds in the Term
Rate Mode or the Fixed Rate Mode.
"Available Moneys" means, when a Credit Facility is in effect, (a) moneys drawn under the Credit Facility
which at all times since their receipt by the Trustee or the Tender Agent were held in a separate segregated account
or accounts or subaccount or subaccounts in which no moneys (other than those drawn under the Credit Facility)
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were at any time held, (b) moneys which have been paid to the Trustee or the Tender Agent by the County or the
Corporation and have been on deposit with the Trustee or the Tender Agent for at least 124 days (or, if paid to the
Trustee or the Tender Agent by any Person who is an "insider" with respect to the County or the Corporation, 366
days) during and prior to which no Event of Bankruptcy shall have occurred, (c) any other moneys, if, in the opinion
of nationally recognized counsel experienced in bankruptcy matters (which opinion shall be acceptable to each
Rating Agency then rating the Series 2008 Bonds), the application of such moneys will not constitute an avoidable
preference in the event of the occurrence of an Event of Bankruptcy, and (d) investment earnings on any of the
moneys described in clauses (a), (b) and (c) of this definition.
"Bank Bond Interest Differential Amount" means, as to any Bank Bond for any period for which interest
on such Bank Bond has not been paid, the difference between the amount of accrued interest on such Bank Bond at
the Bank Bond Rate during such period and the amount of interest on such Series 2008 Bond included in the sales
price therefor.
"Bank Bond Rate" means the interest rate, if any, specified in the Liquidity Facility or the Credit Facility
Provider Agreement then in effect as the rate at which Bank Bonds shall bear interest, such rate not to exceed the
Maximum Rate; provided, however, that if no such rate is specified in the Liquidity Facility or the Credit Facility
Provider Agreement then in effect, then Bank Bonds shall continue to bear interest and such interest shall accrue and
be payable as specified in this Series Resolution as if such Bank Bonds were not Bank Bonds.
"Bank Bonds" means Series 2008 Bonds purchased by the Liquidity Facility Provider or the Credit Facility
Provider pursuant to a Liquidity Facility or a Credit Facility, but excluding Series 2008 Bonds no longer considered
Bank Bonds pursuant to the terms of such Liquidity Facility or Credit Facility. Bank Bonds do not include Pledged
Bonds.
"Bankruptcy Code" means Title 11 of the United States Code, as amended, and any successor statute.
"Board" has the meaning set forth in the Preamble hereof.
"Bond CounseP' means any nationally recognized municipal bond counsel acceptable to the County.
"Bond Fund' means the Fund by that name created under Section 502(A) hereof.
"Bond Order" means the bond order adopted by the Board on October 6, 1993, as amended and
supplemented by a first supplemental bond order adopted by the Board on February 5, 1999 and a second
supplemental bond order adopted by the Board on December 7, 2005.
"Bond Register" means the registration books of the County kept by the Trustee to evidence the
registration and transfer of Series 2008 Bonds.
"Bond Year" means the period commencing on October 1 of each year and ending on September 30 of the
following year; provided, however, that the initial Bond Year shall commence on the Closing Date and end on
September 30, 2009.
"Bondholder," "holder," "Holder," "Owner" or "owner of the Series 2008 Bonds" means the registered
owner of any Series 2008 Bond and does not mean any beneficial owner of a Series 2008 Bond whether through a
book-entry system or otherwise.
"Broker Dealer" has the meaning set forth in Exhibit B hereto.
"Business Day" means a day which is not (a) a Saturday, Sunday or legal holiday on which banking
organizations in the State of New York or the city in which the Principal Office of the Liquidity Facility Provider, if
any, the Credit Facility Provider, if any, the Remarketing Agent, if any, the Tender Agent, if any, the Auction Agent,
if any, any Broker-Dealer, if any, or the Trustee is located are authorized by law to close and on which such entity is
in fact closed or (b) a day on which the New York Stock Exchange is closed.
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"Closing Date" means the date of original issuance and delivery of the Series 2008 Bonds.
"County" has the meaning set forth in the Preamble hereof.
"County Attorney" means the County Attorney of the County, the person performing the duties of the
County Attorney or the official succeeding to the County Attorney's principal functions.
"County Manager" means the County Manager of the County, the person performing the duties of the
County Manager or the official succeeding to the County Manager's principal functions.
"Credit Facility" means, initially, the irrevocable, direct-pay letter of credit issued in favor of the Trustee
by RBC Bank (USA) and all amendments, extensions, renewals or substitutions thereof pursuant to its terms, and
upon the effectiveness of any Substitute Credit Facility, such Substitute Credit Facility. The Credit Facility shall
provide for the payment of principal and purchase price of and interest on the Series 2008 Bonds in the manner set
forth in Section 220. A Liquidity Facility shall not be deemed to be a Credit Facility within the meaning of this
Series Resolution.
"Credit Facility Event of Defaulf' means (i) a wrongful failure by the Credit Facility Provider to honor its
obligation to purchase Series 2008 Bonds under a Credit Facility or (ii) the institution of bankruptcy, receivership,
liquidation or similar proceedings by or against the Credit Facility Provider, if not dismissed or stayed within 30
days.
"Credit Facility Provider" means the issuer of the Credit Facility, initially RBC Bank (USA), and upon the
effectiveness of a Substitute Credit Facility, the issuer of such Substitute Credit Facility.
"Credit Facility Provider Agreemenf' means any agreement between the Corporation or the County and
the Credit Facility Provider, pursuant to which a Credit Facility is issued by the Credit Facility Provider, as the same
may be amended or supplemented, initially the Letter of Credit and Reimbursement Agreement, dated as of October
1, 2008, among the Corporation, the County and RBC Bank (USA).
"Credit or Liquidity Facility Deposit Accounf' means the account by that name within the Purchase Fund
established pursuant to Section 310(A) hereof.
"Cure Period' has the meaning given in Section 310(C) hereof.
"Current Mode" shall have the meaning specified in Section 210 hereof.
"Daily Mode" means the Mode during which Series 2008 Bonds bear interest at the Daily Rate.
"Daily Rate" means an interest rate that is determined on each Business Day with respect to the Series
2008 Bonds in the Daily Mode pursuant to Section 205 hereof.
"Date of Original Issuance" means the Closing Date.
"Defaulted Interest" means interest on any Series 2008 Bond which is payable but not duly paid on the
date due.
"Eligible Bonds" means any Series 2008 Bonds other than Bank Bonds or Series 2008 Bonds owned by,
for the account of, or on behalf of, the County or the Corporation or any Affiliate of the Corporation.
"Event of Bankruptcy" means the commencement of a case by or against the County or the Corporation (or
any "insider" with respect to the County or the Corporation which has paid funds either directly or indirectly to the
Trustee for redemption of Series 2008 Bonds) under the Bankruptcy Code or under any other domestic bankruptcy
act or any similar act which hereafter may be enacted (other than any such proceedings initiated by the County or
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the Corporation against a third party other than the County or the Corporation, unless such case shall have been
dismissed and such dismissal shall be final and not subject to appeal.
"Expiration Date" means (i) the stated expiration or termination date of the Liquidity Facility or the Credit
Facility and (ii) the date upon which a Liquidity Facility or the Credit Facility terminates following voluntary
termination by the Corporation pursuant to this Series Resolution.
"Failed Purchase Date" has the meaning given in Section 310(C) hereof.
"Favorable Opinion of Bond CounseP' means, with respect to any action the occurrence of which requires
such an opinion, an unqualified Opinion of Bond Counsel, to the effect that such action is permitted under this
Series Resolution and will not, in and of itself, adversely affect the validity or enforceability of the Series 2008
Bonds or result in the inclusion of interest on the Series 2008 Bonds in gross income for federal income tax purposes
(subject to the inclusion of any exceptions contained in the opinion or opinions of Bond Counsel delivered upon
original issuance of the Series 2008 Bonds), and containing any other opinion specifically required by the provisions
of this Series Resolution.
"Fifth Amendment to Lease Agreemenf' means the Fifth Amendment to the Lease Agreement, dated as of
October 1, 2008, by and between the County and the Corporation.
"Finance Director" means the Finance Director of the County, the person performing the duties of the
Finance Director or the official succeeding to the Finance Director's principal functions.
"Fitch" means Fitch, Inc., a corporation organized and existing under the laws of the State of Delaware, its
successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities
rating agency designated by the Corporation by written notice to the County, the Liquidity Facility Provider (if any),
the Credit Facility Provider (if any), the Auction Agent (if any), the Broker-Dealer (if any) and the Trustee and
acceptable to the Local Government Commission.
"Fixed Rate" means the fixed interest rate or rates on Series 2008 Bonds determined pursuant to and in
accordance with Sections 207, 210(B), 210(C) and 302(C) hereof.
"Fixed Rate Bonds" means the Series 2008 Bonds during a Fixed Rate Mode.
"Fixed Rate Mode" means a Mode during which Series 2008 Bonds bear interest at a Fixed Rate to the
Maturity Date of such Series 2008 Bonds.
"Fixed Rate Period" means the period from the date the Series 2008 Bonds are converted to a Fixed Rate
Mode to the Maturity Date of such Series 2008 Bonds.
"Fund" means any of the funds established pursuant to this Series Resolution.
"Immediate Notice" means notice by telephone, email transmission or telecopier to such address as the
addressee shall have provided in writing, promptly followed by written notice by first class mail, postage prepaid;
provided, however, that if any Person required to give an Immediate Notice shall not have been provided with the
necessary information as to the telephone, email transmission or telecopier number of an addressee, Immediate
Notice shall mean written notice by first class mail, postage prepaid.
"Immediate Termination Date" means the date on which a Liquidity Facility Provider's obligation to
advance funds or purchase Series 2008 Bonds under a Liquidity Facility terminates immediately in accordance with
its terms.
"Independent CounseP' means an attorney duly admitted to practice law before the highest court of any
state and, without limitation, may include independent legal counsel for the Corporation, the County or the Trustee.
"Interest Account" means the account by that name created in the Bond Fund under Section 502 hereof.
"Interest Payment Date" means (1) with respect to Series 2008 Bonds in a Daily Mode or a Weekly Mode,
the first Business Day of each month; (2) with respect to Series 2008 Bonds in a Term Rate Mode, each Term Rate
Interest Rate Payment Date for such Series 2008 Bonds and the final day of the current Interest Period if other than a
Term Rate Interest Payment Date; (3) with respect to Series 2008 Bonds in the Fixed Rate Mode, each Stated
Interest Payment Date (beginning with the first Stated Interest Payment Date that occurs no earlier than three months
after the commencement of the Fixed Rate Mode for such Series 2008 Bonds; (4) with respect to a Series 2008 Bond
in the Auction Mode, the Business Day immediately following the last day of each Auction Period; provided that if
an Auction Period exceeds one year, the Interest Payment Date shall be the first April 1 or October 1 following the
month in which such Auction Period commences and each April 1 or October 1 thereafter during such Auction
Period and the Business Day immediately following the last day of such Auction Period; (5) any Mode Change
Date; (6) any Substitute Liquidity Facility Date or Substitute Credit Facility Date; (7) the respective Maturity Dates
of the Series 2008 Bonds; (8) any Expiration Date; (9) any Notice Termination Date; and (10) with respect to Bank
Bonds, the days on which interest is due pursuant to the Liquidity Facility or the Credit Facility Provider Agreement
then in effect.
"Interest Payment Period" means the period commencing on and including the last Interest Payment Date
to which interest has been paid on a Series 2008 Bond (or, if no interest has been paid from the Date of Original
Issuance of the Series 2008 Bond, commencing on the Date of Original Issuance) to, but not including, the Interest
Payment Date on which interest is to be paid.
"Interest Period" means the period of time that an interest rate remains in effect, which period:
(1) with respect to Series 2008 Bonds in a Daily Mode, commences on a Business Day and extends to,
but does not include, the next succeeding Business Day;
(2) with respect to Series 2008 Bonds in a Weekly Mode, commences on the first day such Series
2008 Bonds begin to accrue interest in the Weekly Mode and ends on the next succeeding Tuesday, and thereafter
commences on each Wednesday and ends on Tuesday of the following week;
(3) with respect to Series 2008 Bonds in an Auction Mode, shall be an Auction Period;
(4) with respect to Series 2008 Bonds in a Term Rate Mode, initially, shall be from and including the
Mode Change Date to, but not including, the Purchase Date established pursuant to Section 206 hereof and
thereafter shall be from and including such Purchase Date to but not including the next Purchase Date; provided that
the Interest Period shall be at least 180 days in length; and
(5) with respect to Series 2008 Bonds in a Fixed Rate Mode, shall be the Fixed Rate Period.
"Interested Parties" means the County, the Corporation, the Local Government Commission, the Trustee,
the Tender Agent (if any), the Paying Agent (if any), the Liquidity Facility Provider (if any), the Credit Facility
Provider (if any), the Remarketing Agent (if any), the Auction Agent (if any), the Broker-Dealers (if any) and the
Bondholders.
"Investment Grade" means (i) that rating of any Rating Agency with a rating then in effect with respect to
the Series 2008 Bonds that represents the lowest rating that any of such Rating Agencies recognizes as being
investment grade and (ii) each rating above such rating.
"Investment Obligations" means, for purposes of this Series Resolution, to the extent from time to time
permitted by law, including Section 159-30 of the General Statutes of North Carolina, as amended:
(a) Government Obligations;
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(b) bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the
following: United States Export-Import Bank, Farmers Home Administration, Federal Financing Bank, Federal
Housing Administration Debentures, General Services Administration, Government National Mortgage Association,
United States Maritime Administration, United States Department of Housing and Urban Development, Federal
Home Loan Bank System, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and
Student Loan Marketing Association and including principal only or interest only interests in such securities if such
components are created or stripped as separate obligations directly by the issuer of such securities;
(c) Certificates of deposit or time deposits of any bank (including without limitation the Trustee), trust
company or savings and loan association if such certificates of deposit or time deposits are fully secured by a
security interest in Government Obligations or by obligations described in clause (b) of this definition (except for
bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by the Federal Home Loan Bank
System, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association or Student Loan
Marketing Association); provided, however, that if such certificates of deposit or time deposits are so secured (1) the
Trustee shall have a perfected first security interest in the obligations securing such certificates of deposit or time
deposits, (2) the Trustee shall hold or shall have the option to appoint an intermediary bank, trust company or
savings and loan association as its agent to hold the obligations securing such certificates of deposit or time deposits,
and (3) the Trustee or its appointed agent shall hold such obligations free and clear of the liens or claims of third
parties;
(d) Certificates of deposit or time deposits of any bank (including the Trustee), trust company or
savings and loan association which certificates of deposit or time deposits are fully insured by the Federal Deposit
Insurance Corporation or any other similar United States governmental deposit insurance program;
(e) Securities of the type described in clauses (a) or (b) (but only if backed by the full faith and credit
of the United States government) above purchased under agreements to resell such securities to any primary dealer
listed on the Federal Reserve reporting dealer list or any commercial bank, if such bank, at the time of purchase of
such agreements, has an uninsured, unsecured and unguaranteed obligation rating of "A" or better by S&P and
Moody's, provided: (1) a master repurchase agreement or specific written repurchase agreement governs the
transaction; (2) the securities are held free and clear of any lien or claims by a third party (other than as agent as
hereinafter described) by the Trustee or an independent third party acting solely as agent for the Trustee, and such
agent is (A) a Federal Reserve Bank, or (B) a bank which is a member of the Federal Deposit Insurance Corporation
and which has combined capital, surplus and undivided profits of not less than $75,000,000 and the Trustee shall
have received written confirmation from such agent that it holds such securities, free and clear of any lien or claim,
as agent for the Trustee; (3) a perfected first security interest under the Uniform Commercial Code, or book-entry
procedures prescribed at 31 CFR 306.1 et seq. or 31 CFR 350.0 et seq. in such securities is created for the benefit of
the Trustee; (4) the repurchase agreement (A) has a term of 30 days or less or (B) permits withdrawal of the moneys
invested therein at par upon not more than three Business Days' notice, and the Trustee will value the collateral
securities no less frequently than monthly marked to market at the current market price plus accrued interest; (5) the
repurchase agreement (A) matures at least ten days (or other commercially reasonable liquidation period) prior to
the date on which the moneys invested therein are reasonably expected to be needed by the Trustee or (B) permits
withdrawal of the moneys invested therein at par upon not more than three Business Days' notice; (6) the fair market
value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is
equal to at least 104% (105% if the securities used as collateral are issued by the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation) and the repurchase agreement provides that if the
value of the securities held as collateral declines below 104% or 105%, whichever is applicable, the Trustee will
receive additional cash and/or acceptable securities as collateral for the repurchase obligation in an amount sufficient
to restore such percentage; and (7) there is delivered to the Trustee a Favorable Opinion of Bond Counsel that such
agreement to resell is permitted under Section 159-30 of the General Statutes of North Carolina, as amended;
(f) Investment agreements with or fully guaranteed by banks which meet the rating criteria set forth in
(e) above or investment agreements with or fully guaranteed or insured by non-bank fmancial institutions (1) all of
the unsecured, direct, long-term debt or the claims paying ability of which is rated, at the time of purchase of such
agreements, by a Rating Agency in one of the two highest rating categories (without regard to any refinement or
gradation of rating category by numerical modifier or otherwise) for obligations of that nature; or (2) if such
insurance companies have no outstanding long-term debt, all of the short-term debt of which is rated, at the time of
7
purchase of such agreements, by a Rating Agency in the highest rating category (without regard to any refinement or
gradation of rating category by numerical modifier or otherwise) assigned to short-terYn indebtedness by such Rating
Agencies;
(g) Shares of a fund registered under the Investment Company Act of 1940, as amended, whose shares
are registered under the Securities Act of 1933, as amended, having assets of at least $100,000,000, whose only
assets are obligations described in (a) and (b) above, and which shares, at the time of purchase, are rated "AAm-G,"
"AAAm" or "AAm" by S&P and, if rated by Moody's, are rated "Aaa," "Aal" or "Aa2;"
(h) Commercial paper maturing not more than 270 days from the date of issuance thereof which, at
the time of purchase, is rated by Moody's and S&P in one of the two highest rating categories (without regard to any
refinement or gradation of rating category by numerical modifier or otherwise) assigned by such Rating Agencies
for obligations of that nature;
(i) Obligations of, or obligations fully guaranteed by, any state of the United States of America or any
political subdivision thereof which obligations, at the time of purchase, are rated by Moody's and S&P in one of the
two highest rating categories (without regard to any refinement or gradation of rating category by numerical
modifier or otherwise) assigned by such Rating Agencies to obligations of that nature;
(j) Obligations which are rated, at the time of purchase, "AAA" by S&P or "Aaa" by Moody's and
which are not subject to redemption prior to maturity (except as provided in the security agreement described below)
and are issued or incurred by any state, commonwealth or territory of the United States of America or any political
subdivision, public instrumentality or public authority of any state, commonwealth or territory of the United States
of America, which obligations are fully secured by and payable solely from an escrow fund consisting of direct
obligations of, or obligations the timely payment of principal and interest on which are fully guaranteed by, the
United States of America, which security is held by a corporate fiduciary pursuant to an escrow agreement (which
may not be amended to provide for redemption on a date earlier than that originally contemplated by the parties on
the date such escrow agreement was first executed) and the sufficiency of which for payment of such obligations has
been verified by an accountant in a report, a copy of which has been delivered to the trustee by or for whose benefit
such Obligations are acquired and held; and
(k) Bankers acceptances with a maximum term of one year of any bank or trust company organized
under the laws of the United States of America or any state thereof, including the Trustee, which bank or trust
company at the time of purchase of such acceptance has an uninsured, unsecured and unguaranteed obligation rating
of "Aa3" or better by Moody's or "AA-" or better by S&P.
"Issuance Costs" has the meaning given in Section 507 hereof.
"Letter of Representations" means the Blanket Letter of Representations from the County to DTC dated
August 21, 1995.
"Liquidity Facility" means a standby bond purchase agreement, letter or line of credit, surety bond or
similar liquidity facility issued by a Liquidity Facility Provider which, by its terms, provides for the payment of the
Purchase Price of Series 2008 Bonds tendered and not remarketed, furnished by the County and the Corporation to
the Tender Agent under this Series Resolution, including any Substitute Liquidity Facility, which Liquidity Facility
and all agreements relating to the obligation to reimburse the Liquidity Facility Provider for draws thereunder, if
any, shall be approved by the County and the Corporation. A Credit Facility shall not be deemed to be a Liquidity
Facility within the meaning of this Series Resolution.
"Liquidity Facility Event of Default' means (i) a wrongfizl failure by the Liquidity Facility Provider to
honor its obligation to purchase Series 2008 Bonds under a Liquidity Facility or (ii) the institution of bankruptcy,
receivership, liquidation or similar proceedings by or against the Liquidity Facility Provider, if not dismissed or
stayed within 30 days.
"Liquidity Facility Provider" means the commercial bank, savings institution, insurer or other financial
institution.
"Local Government Commission" means the Local Government Commission of North Carolina, a division
of the Department of State Treasurer, established by Section 159-3 of the General Statutes of North Carolina, and
any successor or successors thereto.
"Mandatory Purchase Date" means: (i) any Mode Change Date; and (ii) any Termination Date, Substitute
Liquidity Facility Date, Substitute Credit Facility Date or Expiration Date.
"Maturity Date" means (i) with respect to the Series 2008 Bonds, October 1, 2038 or (ii) with respect to
any Series 2008 Bonds upon change to the Fixed Rate Mode, such maturities as are determined pursuant to Section
302(C) hereof; provided that while any Series 2008 Bonds bear interest at the Auction Period Rate, such Series 2008
Bonds shall mature on and the Maturity Date thereof shall be the Interest Payment Date for such Series 2008 Bonds
immediately preceding the Maturity Date.
"Maximum Rate" means the lesser of (i) the highest interest rate that may be borne by the Series 2008
Bonds under applicable State law, (ii) while the Series 2008 Bonds bear interest at the Daily Rate or the Weekly
Rate, 12% per annum, (iii) while the Series 2008 Bonds bear interest at the Auction Period Rate, 15% per annum,
(iv) while the Series 2008 Bonds bear interest at the Bank Bond Rate, 25% per annum, (v) for any loan made or
obligation incurred under a Credit Facility or a Liquidity Facility with respect to Series 2008 Bonds purchased with
a tender advance under a Credit Facility or a Liquidity Facility, the rate per annum provided in the Credit Facility
Provider Agreement or the Liquidity Facility, which shall not exceed 25% per annum, and (v) while the Series 2008
Bonds bear interest at the Term Rate, 12% per annum.
"Mode" means, as the context may require, the Auction Mode, the Daily Mode, the Weekly Mode, the
Term Rate Mode or the Fixed Rate Mode.
"Mode Change Date" means the day following the last day of one Mode for any Series 2008 Bonds on
which another Mode begins.
"Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of
the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other
nationally recognized securities rating agency designated by the Corporation by written notice to the County, the
Liquidity Facility Provider (if any), the Credit Facility Provider (if any), the Auction Agent (if any), the Broker-
Dealer (if any) and the Trustee and acceptable to the Local Government Commission.
"New Mode" has the meaning specified in Section 210 hereof.
"Notice Termination Date" means the date (other than an Immediate Termination Date) on which a
Liquidity Facility Provider's obligation to advance funds or purchase Series 2008 Bonds under a Liquidity Facility
terminates as stated in the Liquidity Facility Provider's notice of termination delivered pursuant to such Liquidity
Facility, which date of termination shall be thirty (30) days (or such greater number of days as is specified in the
Liquidity Facility) after the date of receipt by the Trustee and the Tender Agent of such notice.
"Official Statement" means an Official Statement prepared in connection with the issuance and sale of the
Series 2008 Bonds.
"Opinion of Bond Counsel" means a written opinion of Bond Counsel in form and substance acceptable to
the County and the Trustee, which opinion may be based on a ruling or rulings of the Internal Revenue Service.
"Opinion of Counsel' means a written opinion of counsel who is acceptable to the County in form and
substance acceptable to the County and the Trustee.
9
"Outstanding Series 2008 Bonds" or "Series 2008 Bonds Outstanding" means all Series 2008 Bonds
which have been duly authenticated and delivered by the Trustee under this Series Resolution, except:
(a) Series 2008 Bonds canceled after purchase in the open market or because of payment at
or redemption prior to maturity;
(b) Series 2008 Bonds for the payment or redemption of which cash or Government
Obligations shall have been theretofore deposited with the Trustee (whether upon or prior to the maturity or
redemption date of any such Series 2008 Bonds) in accordance with the Series Resolution; provided that if
such Series 2008 Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given or arrangements satisfactory to the Trustee shall have been made therefor, or waiver of
such notice satisfactory in form to the Trustee shall have been filed with the Trustee;
(c) Series 2008 Bonds in lieu of which others have been authenticated under the Series
Resolution; and
(d) Series 2008 Bonds deemed tendered for purchase pursuant to Section 310(D) hereof.
"Paying AgenP' means the bank or banks, if any, designated pursuant to this Series Resolution to receive
and disburse the principal of and interest on the Series 2008 Bonds.
"Person" means any natural person, firm, joint venture, association, partnership, business trust,
corporation, public body, agency or political subdivision thereof or any other similar entity.
"Pledged Bonds" means any Series 2008 Bond purchased with the proceeds from a draw on a Credit
Facility and pledged to the Credit Facility Provider pursuant to the Credit Facility Provider Agreement.
"Principal Office" means, when used with respect to the Trustee, the corporate trust office of the Trustee
identified as such for the performance of the functions in question, and, when used with respect to any other entity,
means the principal office of such entity or such other office of such entity as may be designated by that entity in
writing to the Trustee.
"ProjecP' has the meaning set forth in the Preamble hereof.
"Project Fund" means the Fund created by Section 502(C) hereof.
"Purchase Agreement" means the bond purchase agreement for the Series 2008 Bonds among the County,
the Corporation, the Local Government Commission and the purchasers named therein.
"Purchase Date" means with respect to Series 2008 Bonds (i) during the Daily Mode or the Weekly Mode,
a Business Day for which notice of tender as required by Section 304 hereof has been given and (ii) during the Term
Rate Mode, the Business Day following the end of each Interest Period.
"Purchase Fund" means the fund by that name created under Section 310(A) hereof.
"Purchase Price" means (i) an amount equal to the principal amount of any Series 2008 Bonds purchased
on any Purchase Date, plus, in the case of any purchase of Series 2008 Bonds in the Daily Mode or the Weekly
Mode, accrued and unpaid interest thereon, if any, to the Purchase Date, or (ii) an amount equal to the principal
amount of Series 2008 Bonds purchased on a Mandatory Purchase Date, plus accrued and unpaid interest thereon, if
any, to the Mandatory Purchase Date.
"Rate Determination Date," means the date on which the interest rate(s) with respect to some or all of the
Series 2008 Bonds shall be determined, which, (i) in the case of the Daily Mode, shall be each Business Day
commencing with the first day such Series 2008 Bonds become subject to the Daily Mode; (ii) in the case of
conversion to the Weekly Mode, shall be, initially upon the conversion to such Mode, no later than the Business Day
10
immediately prior to the Mode Change Date, and thereafter, shall be each Wednesday or, if Wednesday is not a
Business Day, the next succeeding day or, if such day is not a Business Day, then the Business Day immediately
preceding such Wednesday; (iii) in the case of the Fixed Rate Mode, shall be a date determined by the Remarketing
Agent which shall be at least one Business Day prior to the Mode Change Date; (iv) in the case of the Term Rate
Mode, shall be a Business Day no earlier than 30 Business Days and no later than the Business Day immediately
preceding the first day of each Interest Period, as selected by the Remarketing Agent; and (v) in the case of Series
2008 Bonds in the Auction Mode, shall be the Auction Date.
"Rating Agency" means Moody's, Fitch or Standard & Poor's, and their respective successors and assigns.
"Record Date" means (i) with respect to Series 2008 Bonds in the Daily Mode, Weekly Mode or Auction
Mode, the day (whether or not a Business Day) immediately preceding each Interest Payment Date, and (ii) with
respect to Series 2008 Bonds in a Term Rate Mode or a Fixed Rate Mode, the fifteenth (15~') day (whether or not a
Business Day) of the calendar month immediately preceding such Interest Payment Date or, in the event that an
Interest Payment Date shall occur less than fifteen (15) days after the first day of a Term Rate Period or Fixed Rate
Period, such first day.
"Redemption Date" means, when used with respect to any Series 2008 Bond to be redeemed, the date fixed
for such redemption pursuant to Article III hereof.
"Redemption Fund" means the fund created and so designated by Section 505 of this Series Resolution..
"Redemption Price" means, with respect to any Series 2008 Bond (or portion thereof), the price to be paid
upon redemption as set forth in Article III of this Series Resolution.
"Remarketing AgenP' means any remarketing agent appointed by the Corporation in accordance with
Sections 311 and 312 hereof and at the time serving as such under the Remarketing Agreement. RBC Capital
Markets Corporation will serve as the initial Remarketing Agent for the Series 2008A Bonds and Merrill Lynch,
Pierce, Fenner & Smith, Incorporated will serve as the initial Remarketing Agent for the Series 2008B Bonds.
"Remarketing AgreemenP' means any remarketing agreement or agreements among the County, the
Corporation and a Remarketing Agent, as such agreement may from time to time be amended and supplemented, to
remarket the Series 2008 Bonds delivered or deemed to be delivered for purchase by the Holders thereof.
"Remarketing Proceeds Account' means the account by that name within the Purchase Fund established
pursuant to Section 310(A) hereof.
"Securities Depository" means The Depository Trust Company, New York, New York or other recognized
securities depository selected by the County at the request of the Corporation, which maintains abook-entry system
in respect of the Series 2008 Bonds, and shall include any substitute for or successor to the securities depository
initially acting as Securities Depository.
"Securities Depository Nominee" means, as to any Securities Depository, such Securities Depository or the
nominee of such Securities Depository in whose name there shall be registered on the registration books maintained
by the Trustee the Series 2008 Bond certificates to be delivered to and immobilized at such Securities Depository
during the continuation with such Securities Depository of participation in its book-entry system.
"Series 2008A Bonds" means the $20,000,000 aggregate original principal amount of County of New
Hanover, North Carolina Variable Rate Hospital Revenue Bonds (New Hanover Regional Medical Center Project)
Series 2008A.
"Series 2008E Bonds" means the $20,000,000 aggregate original principal amount of County of New
Hanover, North Carolina Variable Rate Hospital Revenue Bonds (New Hanover Regional Medical Center Project)
Series 2008B.
11
"Series 2008 Bonds" means, collectively, the Series 2008A Bonds and the Series 2008B Bonds.
"Series Resolution" means this Series Resolution, including any amendments or supplements hereto.
"SIFMA Municipal Swap Index" means The Securities Industry and Financial Markets AssociationTM
Municipal Swap Index as disseminated by Municipal Market Data, a Thomson Financial Services Company, or its
successor, for the most recently preceding Business Day; provided, however, that if such index is no longer
produced by Municipal Market Data, Inc. or its successor, then "SIFMA Municipal Swap Index" shall mean such
other reasonably comparable index selected by the applicable Remarketing Agent after consultation with the
Corporation.
"Sinking Fund Account' means the account by that name created in the Bond Fund under Section 502
hereof to which amounts are to be deposited in accordance with Section 504 hereof.
"Special Record Date" means the date fixed by the Trustee pursuant to Section 211 of this Series
Resolution for the payment of Defaulted Interest.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and
assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "Standard & Poor's" shall be deemed to refer to any other nationally recognized securities
rating agency designated by the Corporation by written notice to the County, the Liquidity Facility Provider (if any),
the Credit Facility Provider (if any), the Auction Agent (if any), the Broker-Dealer (if any) and the Trustee and
acceptable to the Local Government Commission.
"Stated Interest Payment Date" means each April 1 and October 1.
"Substitute Credit Facility" means a replacement irrevocable, direct-pay letter of credit containing
administrative provisions reasonably satisfactory to the Trustee, issued and delivered to, and accepted by, the
Trustee in accordance with Section 221; provided, however, that any amendment, extension, renewal or substitution
of the Credit Facility then in effect for the purpose of extending the Expiration Date of such Credit Facility or
modifying such Credit Facility pursuant to its terms shall not be deemed to be a Substitute Credit Facility for
purposes of this Series Resolution.
"Substitute Credit Facility Date" means the date that a Substitute Credit Facility is furnished to the Trustee
by the County and the Corporation pursuant to Section 221 of this Series Resolution.
"Substitute Liquidity Facility" means a Liquidity Facility after the initial Liquidity Facility furnished to
the Tender Agent pursuant to Section 219 of this Series Resolution.
"Substitute Liquidity Facility Date" means the date that a Substitute Liquidity Facility is furnished to the
Tender Agent by the County and the Corporation pursuant to Section 219 of this Series Resolution.
"Tax Compliance Certificate" means the Tax Compliance Certificate dated the Date of Original Issuance
of the Series 2008 Bonds and issued by the County and the Corporation.
"Tender Agent' means any tender agent appointed in accordance with Section 313 hereof. Initially, the
Trustee will act as the Tender Agent.
"Term Rate" means the per annum interest rate with respect to any Series 2008 Bonds in the Term Rate
Mode determined pursuant to Section 206 hereof.
"Term Rate Interest Payment Date" means, with respect to a Series 2008 Bond in the Term Rate Mode
and for the current Interest Period for such Series 2008 Bond, each Stated Interest Payment Date occurring in such
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Interest Period (beginning with the first Stated Interest Payment Date that occurs no earlier than three months after
the commencement of such Interest Period).
"Term Rate Mode" means the Mode during which any Series 2008 Bonds bear interest at the Term Rate.
"Weekly Mode" means the Mode during which any Series 2008 Bonds bear interest at the Weekly Rate.
"Weekly Rate" means an interest rate that is determined on a weekly basis with respect to any Series 2008
Bonds in the Weekly Mode pursuant to Section 205 hereof.
Section 102. Rules of Construction. (A) Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise
indicate, the words "Bond", "owner", "Holder" and "Person" shall include the plural as well as the singular number.
(B) While the provisions for setting the interest rates on the Series 2008 Bonds are identical and all
Series 2008 Bonds of a particular Series must bear interest at an interest rate using the same Mode, each Series of
the Series 2008 Bonds is not required to bear interest in the same Mode as the other Series of the Series 2008
Bonds. In addition to the provisions for setting the interest rates on the Series 2008 Bonds, other provisions in this
Series Resolution may similarly apply individually to each Series of the Series 2008 Bonds without applying to the
other Series of the Series 2008 Bonds, including, but not limited to, provisions regarding payment dates, book-
entry, tender, redemption, conversion and liquidity. In the context of provisions herein that may apply separately
to each Series, in order to permit such separate application, any reference to a "Series 2008 Bond" or the "Series
2008 Bonds" in such provisions shall be read as only meaning the applicable Series of the Series 2008 Bonds, and
references to deemed terms that are used in relation to the Series 2008 Bonds in such provisions shall be read as
applying only to the applicable Series of the Series 2008 Bonds. References to the Remarketing Agent shall
similarly be read to mean only the Remarketing Agent for the applicable Series of the Series 2008 Bonds.
ARTICLE II.
THE SERIES 2008 BONDS
Section 201. Authority for and Issuance of Series 2008 Bonds. (A) No Series 2008 Bonds may be
issued under the provisions of this Series Resolution except in accordance with this Article. There is hereby
authorized under Chapter 159, Article 5 of the General Statutes of North Carolina, the Bond Order and this Series
Resolution two Series of Bonds designated the "County of New Hanover, North Carolina Variable Rate Hospital
Revenue Bonds (New Hanover Regional Medical Center Project), Series 2008A," and the "County of New Hanover,
North Carolina Variable Rate Hospital Revenue Bonds (New Hanover Regional Medical Center Project), Series
2008B." The total principal amount for the Series 2008A Bonds that may be issued hereby is equal to $20,000,000.
The total principal amount for the Series 2008B Bonds that may be issued hereby is equal to $20,000,000.
(B) Except as otherwise provided in this Series Resolution, the Series 2008 Bonds shall be
substantially in the form attached hereto as Exhibit A. The form of each Series 2008 Bond may be modified to
reflect the terms of any Mode then applicable thereto and to reflect any trademarked name or other product name
then being utilized by the Remarketing Agent or Agents or Broker Dealer or Dealers for debt obligations bearing
interest on the Mode then applicable thereto. The Series 2008 Bonds shall bear interest from their respective dates
and shall be issuable as registered bonds in Authorized Denominations. Unless the County shall otherwise direct,
the Series 2008A Bonds shall be numbered from RA-1 upward and the Series 2008B Bonds shall be numbered
from RB-1 upward. The Series 2008 Bonds, as initially issued, will be dated as of their Date of Original Issuance.
Except as described in the next sentence, subsequently issued Series 2008 Bonds will be dated as of the later of the
Date of Original Issuance or the most recent preceding Interest Payment Date therefor to which interest has been
paid thereon. Series 2008 Bonds issued on an Interest Payment Date to which interest has been paid thereon will
be dated as of such date. Interest on the Series 2008 Bonds will be payable on each Interest Payment Date thereof.
The Trustee shall, to the extent it has such information, upon written request, make the interest rate borne by the
Series 2008 Bonds available to the Corporation, the County, the Local Government Commission or any owner of
the Series 2008 Bonds.
13
Section 202. Maturity; Modes; Interest Rates and Calculation. (A) The Series 2008 Bonds shall
mature on the Maturity Dates and initially bear interest in the Weekly Mode.
Notwithstanding the foregoing, while any of each Series of the Series 2008 Bonds bear interest at the
Auction Period Rate, such Series 2008 Bonds will mature on and the Maturity Date of such Series 2008 Bonds shall
be, the Interest Payment Date for such Series 2008 Bonds immediately preceding October 1, 2038.
(B) Interest on the Series 2008 Bonds shall be calculated on the basis of (i) a 365- or 366-day year, as
applicable, for the number of days actually elapsed, during a Daily Mode or a Weekly Mode (ii) a 360-day year of
twelve 30-day months during a Terns Rate Mode or a Fixed Rate Mode, and (iii) a 360-day year for the number of
days actually elapsed during an Auction Mode of 183 days or less and a 360 day year of twelve 30-day months
during an Auction Mode of more than 183 days.
The principal of, premium, if any, and interest on and the Redemption Price of the Series 2008 Bonds shall
be payable in any currency of the United States of America which, at the respective dates of payment thereof, is
legal tender for the payment of public and private debts.
Section 203. Payment of Principal of and Interest on the Series 2008 Bonds. (A) The principal or
Redemption Price of the Series 2008 Bonds shall be payable by check in lawful money of the United States of
America upon presentation at the Principal Office of the Trustee to the registered owners of the Series 2008 Bonds
on such date. Interest on the Series 2008 Bonds shall be paid to the Person whose name appears on the Bond
Register as the Holder thereof as of the close of business on the Record Date for each Interest Payment Date.
Payment of the interest on (i) any Series 2008 Bonds during a Daily Mode, a Weekly Mode or an Auction Mode
shall be made by wire transfer in immediately available funds to an account within the United States of America
designated by such Holder and (ii) any Series 2008 Bonds in a Term Rate Mode or a Fixed Rate Mode shall be made
by check mailed by first class mail to such Holder at its address as it appears on such registration books, or, upon the
written request of any Holder of at least $1,000,000 in aggregate principal amount of the Series 2008 Bonds,
submitted to the Trustee at least five Business Days prior to the Record Date, by wire transfer in immediately
available funds to an account within the United States of America designated by such Holder. As long as Cede &
Co. is the Holder of the Series 2008 Bonds, said principal or Redemption Price and interest payments shall be made
to Cede & Co. by wire transfer in immediately available funds. CUSIP number identification shall accompany all
payments of principal or Redemption Price and interest whether by check or by wire transfer. The principal of Bank
Bonds shall be paid as set forth in the Liquidity Facility or the Credit Facility Provider Agreement.
(B) Interest on the Series 2008 Bonds shall be calculated in accordance with Sections 204, ZOS, 206,
207, 208, 209 and 210 hereof and shall be payable on each Interest Payment Date for the immediately preceding
Interest Payment Period. Notwithstanding anything in this Series Resolution to the contrary, Bank Bonds shall
bear interest at the Bank Bond Rate, and such interest shall accrue and be payable on the dates specified in the
Liquidity Facility or the Credit Facility. On each Interest Payment Date, if any Series 2008 Bonds were not Bank
Bonds at any time since the last Interest Payment Date, the County shall pay directly to the Liquidity Facility
Provider or the Credit Facility Provider the Bank Bond Interest Differential Amount. Notwithstanding anything in
this Series Resolution to the contrary, if some, but less than all of the Series 2008 Bonds are Bank Bonds, such
Bank Bonds shall be remarketed at a Purchase Price equal to the principal of such Bank Bonds plus accrued
interest at the rate that would have accrued on such Bank Bond if such Band Bond had not been a Bank Bond. As
soon as practicable, but in any event by no later than 12:00 noon, New York City time, on the date any such Bank
Bond is to be remarketed, the Remarketing Agent shall notify the Trustee and the Liquidity Facility Provider or the
Credit Facility Provider by telephone of the principal amount of the Bank Bond to be remarketed. Upon receipt of
such notice from the Remarketing Agent, the Trustee shall promptly, but not later than 12:30 p.m., New York City
time, on such remarketing date, notify the Liquidity Facility Provider or Credit Facility Provider and the
Remarketing Agent by telephone of the amount of interest that would have accrued on such Bank Bond if such
Bank Bond had not been a Bank Bond. Upon receipt of such notices from the Remarketing Agent and the Trustee,
the Bank Provider shall promptly, but not later than 1:00 p.m., New York City time, on such remarketing date,
notify the Trustee, the County and the Corporation by telephone of the Bank Bond Interest Differential Amount.
Upon receipt of such notice from the Liquidity Facility Provider or Credit Facility Provider, the County shall
immediately, and in no event later than 3:00 p.m., New York City time, on such remarketing date, pay the Bank
14
Bond Interest Differential Amount to the Liquidity Facility Provider or the Credit Facility Provider.
Notwithstanding anything in this Series Resolution to the contrary, if all of the Series 2008 Bonds are Bank Bonds,
the Bank Bonds shall be remarketed at a purchase price equal to the principal of such Bank Bonds, without accrued
interest, and on the remarketing date the County shall pay to the Liquidity Facility Provider or the Credit Facility
Provider all accrued interest on such Bank Bonds at the Bank Bond Rate.
Section 204. Initial Mode and Interest Rates; Subsequent Modes. The Series 2008 Bonds shall
initially bear interest in the Weekly Mode. The Series 2008 Bonds shall bear interest at the initial rates set by the
initial purchasers thereof until October 28, 2008 and thereafter at the Weekly Rates established for each subsequent
Interest Period until and unless such Series 2008 Bonds are converted to a different Mode as provided in Section 210
hereof.
(A) At any given time, the Series 2008A Bonds and the Series 2008B may operate in a different Mode.
Within each Series, all Series 2008 Bonds must operate in the same Mode and interest rate at any given time. A
Series of Series 2008 Bonds in any Mode, other than the Fixed Rate Mode, may be changed to any other Mode at
the times and in the manner hereinafter provided. If the Series 2008 Bonds bear interest at the Daily Rate, the
Weekly Rate, the Term Rate, the Bank Bond Rate or the Auction Period Rate, then such interest rates on the Series
2008 Bonds shall not exceed the Maximum Rate.
In addition, upon any change in Mode or Auction Period, new Series 2008 Bond forms in the New Mode
(as defined in Section 210) may be prepared by the Trustee (with the assistance of Bond Counsel at the request of
the Trustee) and delivered to the holders of such Series 2008 Bonds, which New Bond forms shall identify the Mode
and Auction Period then applicable to the Series 2008 Bonds and reflect the teens then applicable to such Series
2008 Bonds, all as provided in Section 214 hereof. Each holder of Series 2008 Bonds by its acceptance thereof shall
be deemed to have agreed to surrender its Series 2008 Bonds which are being converted to a New Mode or new
Auction Period to the Trustee in exchange for a Series 2008 Bond reflecting the New Mode or Auction Period.
Section 205. Determination of Interest Rates During the Daily Mode and the Weekly Mode.
(A) Method of Determining Interest Rates. Interest on any Series 2008 Bonds in the Daily Mode and
Weekly Mode shall accrue at the rate of interest per annum determined by the Remarketing Agent on and as of the
Rate Determination Date as the minimum rate of interest which, in the judgment of the Remarketing Agent under
then-existing market conditions, would result in the sale of such Series 2008 Bonds, on the Rate Determination
Date, at a price equal to the Purchase Price. Such determination shall be conclusive and binding upon the
Interested Parties.
(B) Determination Time for Daily Rate. During the Daily Mode, the Remarketing Agent shall
establish the Daily Rate by 10:00 a.m. New York City time on each Business Day. The Daily Rate for any day
during the Daily Mode which is not a Business Day shall be the Daily Rate established on the immediately
preceding Business Day. The Remarketing Agent shall make the Daily Rate available (i) by telephone to the
Trustee, any requesting Bondholder or other Interested Party who contacts the Remarketing Agent and (ii) by
Immediate Notice to the Trustee by 2:00 p.m. New York City time on the Business Day after the Rate
Determination Date.
(C) Determination Time for Weekly Rate. During the Weekly Mode, the Remarketing Agent shall
establish the Weekly Rate by 10:00 a.m. New York City time on each Rate Determination Date. The Weekly Rate
shall be in effect (1) initially, from and including the first day any Series 2008 Bonds become subject to the
Weekly Mode to and including the following Tuesday and (2) thereafter, from and including each Wednesday to
and including the following Tuesday. The Remarketing Agent shall make the Weekly Rate available (i) after 4:00
p.m. New York City time on the Rate Determination Date by telephone to the Trustee, any Bondholder or other
Interested Party who contacts the Remarketing Agent and (ii) by Immediate Notice to the Trustee not later than
2:00 p.m. New York City time on the Business Day after the Rate Determination Date.
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Section 206. Determination of Term Rate.
(A) Method of Determining Term Rate, Interest Period and Purchase Date During Term Rate Mode.
Upon any conversion to a Term Rate Mode, the length of the initial Interest Period shall be designated by the
County at the direction of the Corporation. During the Term Rate Mode, the County shall designate at the
direction of the Corporation an Interest Period succeeding the immediately preceding Interest Period. Each such
designation shall be made by the County's giving Immediate Notice thereof to the Trustee, the Tender Agent, the
Remarketing Agent (if any) and the Liquidity Facility Provider (if any) or the Credit Facility Provider (if any)
which shall be given not later than the 10th Business Day preceding the proposed Interest Period for such Series
2008 Bonds. The Term Rate established on each Rate Determination Date for Bonds in the Term Rate Mode shall
be the minimum rate which, in the judgment of the Remarketing Agent, will result in a sale of the Bonds in the
Term Rate Mode at a price equal to the Purchase Price on the first day of the Interest Period immediately
succeeding the Rate Determination Date.
(B) Determination Time for Term Rates. Once the Series 2008 Bonds are changed to the Term Rate
Mode, such Series 2008 Bonds shall continue in the Term Rate Mode until changed to another Mode in accordance
with Section 210 hereof. The Term Rate shall be determined by the Remarketing Agent not later than 4:00 p.m.
New York City time on the Rate Determination Date. After 4:00 p.m. New York City time on the Rate
Determination Date, the Remarketing Agent shall make the Term Rate available by telephone to the Interested
Parties. The Remarketing Agent shall provide Immediate Notice of the Term Rate to the Interested Parties no later
than the second Business Day after the Rate Determination Date.
Section 207. Determination of Fixed Rate. At the option of the County, upon the direction of the
Corporation, the Series 2008 Bonds not bearing interest at Fixed Rates may be converted to bear interest at Fixed
Rates to the Maturity Dates thereof in the manner provided in Sections 210(B) and 302(C) hereof. The Remarketing
Agent shall determine the Fixed Rate for each maturity of the Series 2008 Bonds to be converted to the Fixed Rate
Mode not later than 4:00 p.m. New York City time on the Rate Determination Date as provided in Section 302(C)
hereof. The Fixed Rates shall be the rate or rates determined in accordance with Section 302(C) hereof. The
Remarketing Agent shall make the Fixed Rates available by telephone to the Corporation or the County and the
Tender Agent. Upon request of any Interested Party, the Trustee shall give Immediate Notice of such rate. Such
determination shall be conclusive and binding upon the Interested Parties.
Section 208. Alternate Rate for Interest Calculation. In the case of Series 2008 Bonds other than
Series 2008 Bonds in the Auction Mode, if (a) the Remarketing Agent fails or is unable to determine the interest
rate(s) or Interest Periods with respect to any Series 2008 Bonds, or (b) the method of determining the interest
rate(s) or Interest Periods with respect to any Series 2008 Bonds shall be held to be unenforceable by a court of law
of competent jurisdiction, such Series 2008 Bonds shall thereupon, until such time as the Remarketing Agent again
makes such determination or until there is delivered an Opinion of Counsel to the effect that the method of
determining such rate is enforceable, bear interest from the last date on which such rate was determined in the case
of clause (a) and from the date on which interest was legally paid in the case of clause (b), at the Alternate Rate for
the Mode then in effect.
Section 209. Change to Auction Mode. At the option of the County, upon the direction of the
Corporation, the Series 2008 Bonds bearing interest in another Mode (other than the Fixed Rate Mode) may be
changed to the Auction Mode pursuant to Section 210 hereof and the initial Auction Period Rate for such Auction
Mode shall be determined by the Remarketing Agent upon conversion to the Auction Mode. Thereafter the Auction
Period Rate to be applicable to the Series 2008 Bonds in the Auction Mode during each Auction Period shall be
determined by the Auction Agent and notice thereof shall be given, all as provided in Exhibit B hereto. Exhibit B is
incorporated in this Series Resolution by this reference as if set forth in full herein.
Section 210. Changes in Mode. Subject to the provisions of this Section 210, the Corporation may
effect a change in Mode with respect to the Series 2008 Bonds, other than Series 2008 Bonds in the Fixed Rate
Mode, by following the procedures set forth in this Section.
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(A) Changes to Modes Other than the Fixed Rate Mode. Each Series of the Series 2008 Bonds (other
than Series 2008 Bonds in the Fixed Rate Mode, which must remain in the applicable Mode and Series 2008
Bonds proposed to be changed to the Fixed Rate Mode which shall be governed by Section 210(B) hereof) may be
changed from one Mode to another Mode as follows:
(1) Mode Change Notice; Notice to Holders. No later than the twentieth day preceding the
proposed Mode Change Date, the Corporation shall give Immediate Notice to the County, the Trustee, the
Tender Agent (if any), the Remarketing Agent (if any), the Auction Agent (if any), the Broker-Dealer (if
any), the Liquidity Facility Provider (if any) and the Credit Facility Provider (if any) specifying the Series
of the Series 2008 Bonds to which such notice relates and its intention to effect a change in the Mode from
the Mode then in effect (for purposes of this Section, the "Current Mode") to another Mode (for purposes
of this Section, the "New Mode") specified in such written notice, if the change is to a Term Rate Mode,
the length of the initial Interest Period, and, if the change is to an Auction Mode, the length of the initial
Auction Period. Notice of the mandatory purchase on the Mandatory Purchase Date resulting from the
proposed change in Mode shall be given to the Holders pursuant to Section 306.
(2) Determination of Interest Rates. The New Mode shall commence on the Mode Change
Date and the interest rate(s) with respect to the Series 2008 Bonds in the New Mode shall be determined by
the Remarketing Agent in the manner provided in Sections 205, 206 and 207, as applicable, or, in the case
of Series 2008 Bonds in the Auction Mode, by the Auction Agent as provided in Section 209.
(3) Conditions Precedent.
(a) The Mode Change Date shall be a Business Day.
(b) The Mode Change Date in the case of a change from the Term Rate Mode, shall
be the Purchase Date for the current Interest Period.
(c) The Trustee, the Corporation, the County, the Tender Agent (if any), the
Auction Agent (if any), the Liquidity Facility Provider (if any), the Credit Facility Provider (if
any) and the Remarketing Agent (if any) shall have received on the Mode Change Date a
Favorable Opinion of Bond Counsel dated the Mode Change Date and addressed to the Trustee,
the County, the Tender Agent (if any), the Auction Agent (if any), the Broker-Dealers (if any), the
Liquidity Facility Provider (if any), the Credit Facility Provider (if any) and the Remarketing
Agent (if any).
(d) If the Current Mode is a Mode other than an Auction Mode and the New Mode
is an Auction Mode, the Corporation shall have appointed an Auction Agent and aBroker-Dealer.
(e) If the Current Mode is the Auction Mode, the Corporation shall have appointed
a Remarketing Agent, a Tender Agent and a Liquidity Facility Provider or a Credit Facility
Provider (other than in the case of a change to a Fixed Rate Mode).
(f) The County shall deliver to the Tender Agent a Liquidity Facility or Credit
Facility meeting the requirements hereof if such a Liquidity Facility or Credit Facility is required
to be in effect under the terms hereof. If there shall be no Liquidity Facility in effect to provide
funds for the purchase of Series 2008 Bonds to be converted to the New Mode on the Mode
Change Date, the remarketing proceeds available on the Mode Change Date shall be not less than
the amount required to purchase all of the Series 2008 Bonds that are converting on such Mode
Change Date at the Purchase Price.
(g) Any designation of a New Mode shall be accompanied by an approval in writing
of such change in Mode by a duly authorized officer of the County.
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(4) Failure to Satisfy Conditions Precedent to Mode Change. If the foregoing conditions
have not been satisfied by the Mode Change Date, the New Mode shall not take effect for the Series 2008
Bonds proposed to be converted to a New Mode, such Series 2008 Bonds shall not be subject to mandatory
tender and purchase on the proposed Mode Change Date and: (a) if the change was from an Auction Mode,
the Series 2008 Bonds proposed to be changed to the New Mode shall remain in the Auction Mode and the
Auction Period shall automatically convert to a seven day period commencing on the failed Mode Change
Date and the interest rate borne by the Series 2008 Bonds proposed to be changed to the New Mode during
the Auction Period commencing on such failed Mode Change Date shall be the Maximum Rate until the
first Auction Date after the proposed Mode Change Date, (b) if the change was from a Term Rate Mode,
the Series 2008 Bond proposed to be changed to the New Mode shall, subject to Section 305, stay in the
Term Rate Mode for an Interest Period ending on the next Stated Interest Payment Date and shall bear
interest at the Alternate Rate and (c) if the change was from a Weekly Mode or a Daily Mode, the Series
2008 Bonds proposed to be changed to the New Mode shall stay in the Weekly Mode or the Daily Mode, as
the case may be.
(5) Liquidity Facility or Credit Facility. Prior to any conversion of the Series 2008 Bonds to
a Daily Mode, a Weekly Mode or a Term Rate Mode, the County, at the direction of the Corporation, shall
obtain a Liquidity Facility or Credit Facility that meets the requirements of this Series Resolution to pay the
Purchase Price on any Purchase Date following such conversion.
(B) Change to Fixed Rate Mode. At the option of the County, upon the direction of the Corporation,
any Series of the Series 2008 Bonds not already in the Fixed Rate Mode may be changed to the Fixed Rate Mode
as provided in this Section 210(B). Not less than 45 days (or such shorter time as maybe agreed to by the Trustee,
the Remarketing Agent and the Auction Agent) before the proposed Mode Change Date, the Corporation shall give
written notice to the Trustee, the County, the Tender Agent (if any), the Auction Agent (if any), the Broker-Dealers
(if any), the Local Government Commission, the Liquidity Facility Provider (if any), the Credit Facility Provider
(if any), the Remarketing Agent (if any) and each Rating Agency then rating the Series 2008 Bonds proposed to be
changed to the New Mode stating that the Mode will be changed to the Fixed Rate Mode and setting forth the
proposed Mode Change Date. Any such change in Mode shall be made as follows:
(1) Conditions Precedent. The Mode Change Date shall be a Business Day and in the case of
a change from the Term Rate Mode, the Mode Change Date shall be the Purchase Date for the current
Interest Period.
(2) Notice to Holders. Not less than the 30th day next preceding the Mode Change Date, the
Trustee shall mail a notice of such proposed change to the Holders of the Series 2008 Bonds proposed to be
changed to the Fixed Rate stating that the Mode will be changed to the Fixed Rate Mode, the proposed
Mode Change Date and that such Holder is required to tender such Holder's Series 2008 Bonds proposed to
be changed to the Fixed Rate for purchase on such proposed Mode Change Date.
(3) Favorable Opinion of Bond Counsel. The change to the Fixed Rate Mode shall not occur
unless the County, the Corporation, the Trustee, the Remarketing Agent (if any), the Credit Facility
Provider (if any) and the Auction Agent (if any) have received, on the Mode Change Date, a Favorable
Opinion of Bond Counsel dated the Mode Change Date and addressed to the County, the Trustee, the
Remarketing Agent (if any) and the Auction Agent (if any).
(4) Certificate Designating Maturities Interest Rates, Etc. Prior to the conversion to the
Fixed Rate Mode, the certificate of the Remarketing Agent described in Section 302(C) shall be provided to
the Trustee, the County and the Corporation.
(5) Firm Underwriting_ or Purchase Contract. Prior to the conversion to the Fixed Rate
Mode, a firm underwriting or purchase contract from a recognized firm of bond underwriters or recognized
institutional investors to underwrite or purchase all Series 2008 Bonds proposed to be changed to the Fixed
Rate which are to be converted on such Mode Change Date at a price of 100% of the principal amount
thereof, which contract may be subject to conditions to purchase, shall be provided to the County, the Local
Government Commission and the Corporation.
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(6) Failure to Satisfy Conditions Precedent to Mode Change. If any of the foregoing
conditions have not been satisfied on or prior to the Mode Change Date, the Fixed Rate Mode shall not
become effective and all Series 2008 Bonds proposed to be changed to the Fixed Rate Mode shall not be
subject to mandatory tender and purchase on the proposed Mode Change Date and: (a) if the change was
from an Auction Mode, such Series 2008 Bonds proposed to be changed to the Fixed Rate shall remain in
the Auction Mode, the Auction Period shall automatically convert to a seven day period commencing on
the failed Mode Change Date and the interest rate for such Series 2008 Bonds during the Auction Period
commencing on such failed Mode Change Date shall be the Maximum Rate until the first Auction Date
after the proposed Mode Change Date, (b) if the change was from a Term Rate Mode then all of the Series
2008 Bonds in such Mode shall, subject to Section 305, stay in the Term Rate Mode for an Interest Period
ending on the next Stated Interest Payment Date and shall bear interest at the applicable Alternate Rate and
(c) if the change was from a Weekly Mode or a Daily Mode, the Series 2008 Bonds proposed to be changed
to the Fixed Rate Mode, shall stay in the Weekly Mode or the Daily Mode, as the case maybe.
(C) Mode Changes Generally. In connection with any Mode change, the Trustee shall identify the
Series 2008 Bonds which are the subject thereof. In addition, upon any change in Mode, new Series 2008 Bonds
.may be prepared by the Trustee (with the assistance of Bond Counsel if requested by the Trustee) and delivered to
the holders of the Series 2008 Bonds, in the New Mode (as defined in Section 210) which shall identify the Mode
then applicable to the Series 2008 Bonds and reflect the terms then applicable to such Series 2008 Bonds, all as
provided in Section 214 hereof. Such new Series 2008 Bonds may also reflect any trademarked name or other
product name then being utilized by the Remarketing Agent or Agents or Broker Dealer or Dealers for debt
obligations bearing interest in the New Mode. Each holder of Series 2008 Bonds by its acceptance thereof shall be
deemed to have agreed to surrender its Series 2008 Bonds which are being converted to a New Mode to the
Trustee in exchange for a form of Series 2008 Bond reflecting the New Mode. Any Series 2008 Bonds not so
delivered shall be deemed to be no longer outstanding hereunder.
Section Zll. Defaulted Interest. Defaulted Interest with respect to any Series 2008 Bond shall cease
to be payable to the holder of such Series 2008 Bond on the relevant Record Date and shall be payable to the holder
in whose name such Series 2008 Bond is registered at the close of business of the Trustee on the special record date
(the "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following
manner. The County shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Series 2008 Bond and the date of the proposed payment (which date shall be such as will enable the Trustee to
comply with the next sentence hereof), and at the same time the County shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the holders of the Series 2008 Bonds entitled to such Defaulted
Interest as provided in this Section. Following receipt of such funds the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the County and the Corporation of such Special Record Date and, in the name and
at the expense of the County and the Corporation, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each holder of a Series
2008 Bond at the address of such holder as it appears on the registration books kept by the Trustee not less than 10
days prior to such Special Record Date. Such Defaulted Interest shall be paid to the holders of the Series 2008
Bonds on which such Defaulted Interest is to be paid in whose names such Series 2008 Bonds are registered on such
Special Record Date.
Section 212. Temporary Series 2008 Bonds.
Series 2008 Bonds may be initially issued in temporary form exchangeable for definitive Series 2008
Bonds of the same Series, if any, when ready for delivery. The temporary Series 2008 Bonds shall be of such
denomination or denominations as may be determined by the County and may contain such reference to any of the
provisions of this Series Resolution as may be appropriate. Every temporary Series 2008 Bond shall be executed by
the County and be authenticated by the Trustee upon the same conditions and in substantially the same manner as
the definitive Series 2008 Bonds. If the County issues temporary Series 2008 Bonds it will execute and furnish
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defmitive Series 2008 Bonds without delay and thereupon the temporary Series 2008 Bonds may be surrendered for
cancellation in exchange therefor at the Principal Office of the Trustee, and the Trustee shall authenticate and
deliver in exchange for such temporary Series 2008 Bonds an equal aggregate principal amount of defmitive Series
2008 Bonds of the same subseries, if any, and maturity of authorized denominations. Until so exchanged, the
temporary Series 2008 Bonds shall be entitled to the same benefits under this Series Resolution as definitive Series
2008 Bonds authenticated and delivered hereunder.
Section 213. Mutilated, Lost, Stolen or Destroyed Bonds. In the event a temporary or defmitive
Series 2008 Bond is mutilated, lost, stolen or destroyed, the County may execute and the Trustee may authenticate a
new Series 2008 Bond of like form, date, subseries, maturity and denomination as that mutilated, lost, stolen or
destroyed; provided that, in the case of any mutilated Series 2008 Bond, such mutilated Series 2008 Bond shall first
be surrendered to the Trustee, and in the case of any lost, stolen or destroyed Series 2008 Bond, there shall be first
furnished to the Trustee evidence of such loss, theft or destruction satisfactory to the County and the Trustee,
together with indemnity satisfactory to them. In the event any such Series 2008 Bond shall have matured, instead of
issuing a duplicate Series 2008 Bond, the County or the Trustee may pay the same without surrender thereof. The
County and the Trustee may charge the holder or owner of such Series 2008 Bond with their reasonable fees and
expenses in this connection.
Section 214. Transfer and Exchange of Series 2008 Bonds; Persons Treated as Owners. The
County shall cause the Bond Register to be kept by the Trustee at its Principal Office.
Upon surrender for transfer of any Series 2008 Bond at the Principal Office of the Trustee, the County shall
execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new fully
registered Series 2008 Bond or Series 2008 Bonds of the same subseries and maturity and of authorized
denomination for the aggregate principal amount which the registered owner is entitled to receive. Any Series 2008
Bond or Series 2008 Bonds may be exchanged at said office of the Trustee for a like aggregate principal amount of
Series 2008 Bond or Series 2008 Bonds of the same maturity of other authorized denominations. The execution by
the County of any Series 2008 Bond shall constitute full and due authorization of such Series 2008 Bond, and the
Trustee shall thereby be authorized to authenticate, date and deliver such Series 2008 Bond.
On each date on which the Trustee authenticates and delivers a Series 2008 Bond, it shall complete the
information required to be inserted by the form of Series 2008 Bond and shall keep a record of such information.
All Series 2008 Bonds presented for transfer or exchange shall be accompanied by a written instrument or
instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the
Trustee, duly executed by the registered owner or by such owner's duly authorized attorney.
No service charge shall be imposed upon the owner for any exchange or transfer of Series 2008 Bonds.
The County, the Corporation and the Trustee may, however, require payment by the person requesting an exchange
or transfer of Series 2008 Bonds of a sum sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto, except in the case of the issuance of a Series 2008 Bond or Series 2008 Bonds for the
unredeemed portion of a Series 2008 Bond surrendered for redemption.
The County, the Trustee and any Paying Agent shall not be required to register the transfer or exchange of
any Series 2008 Bond (i) after notice calling such Series 2008 Bond or portion thereof for redemption has been
mailed or (ii) during the fifteen day period next preceding the mailing of a notice of redemption of the Series 2008
Bonds of the same Series, if any, and maturity.
New Series 2008 Bonds delivered upon any transfer or exchange shall be valid obligations of the County,
evidencing the same debt as the Series 2008 Bonds surrendered, shall be secured by the Bond Order and this Series
Resolution and shall be entitled to all of the security and benefits hereof to the same extent as the Series 2008 Bond
surrendered.
The County, the Trustee, any Paying Agent and the Tender Agent may treat the registered owner of any
Series 2008 Bond as the absolute owner thereof for all purposes, whether or not such Series 2008 Bond shall be
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overdue, and shall not be bound by any notice to the contrary. All payments of or on account of the principal of and
premium, if any, and interest on any such Series 2008 Bond as herein provided shall be made only to or upon the
written order of the registered owner thereof or his legal representative, but such registration may be changed as
herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such
Series 2008 Bond to the extent of the sum or sums so paid.
Any Series 2008 Bond surrendered for the purpose of payment or retirement or for exchange or transfer or
for replacement pursuant to this Section 214 shall be cancelled upon surrender thereof to the Trustee or any Paying
Agent. Any such Series 2008 Bonds cancelled by any Paying Agent other than the Trustee shall be promptly
transmitted by such Paying Agent to the Trustee. Certification of Series 2008 Bonds cancelled by the Trustee and
Series 2008 Bonds cancelled by a Paying Agent other than the Trustee which are transmitted to the Trustee shall be
made to the County and to the Corporation. Cancelled Series 2008 Bonds may be destroyed by the Trustee unless
instructions to the contrary are received from the County and the Corporation.
Section 215. Book-Entry Only System. It is intended that the Series 2008 Bonds be registered so as to
participate in a securities depository system with the Securities Depository, as set forth herein. The Series 2008
Bonds shall be initially issued in the form of a separate single fully registered Series 2008 Bond for each Series of
the Series 2008 Bonds. Upon initial issuance, the ownership of each such Series 2008 Bond shall be registered on
the Bond Register in the name of Cede & Co., or any successor thereto, as nominee for the Securities Depository.
The County's Letter of Representations is on file with the Securities Depository.
With respect to Series 2008 Bonds registered in the Bond Register in the name of Cede & Co., as nominee
of the Securities Depository, the County and the Trustee shall have no responsibility or obligation to any broker-
dealer, bank or other financial institution for which the Securities Depository holds Series 2008 Bonds from time to
time as securities depository (each such broker-dealer, bank or other financial institution being referred to herein as
a "Depository Participant") or to any person on behalf of whom such a Depository Participant holds an interest in
the Series 2008 Bonds (each such person being herein referred to as an "Indirect Participant"). Without limiting the
immediately preceding sentence, the County and the Trustee shall have no responsibility or obligation with respect
to (a) the accuracy of the records of the Securities Depository, Cede & Co., any Depository Participant or any
Indirect Participant with respect to the ownership interest in the Series 2008 Bonds, (b) the delivery to any
Depository Participant or any Indirect Participant or any other person, other than a registered owner of a Series 2008
Bond as shown in the Bond Register, of any notice with respect to the Series 2008 Bonds, including any notice of
redemption, (c) the payment to any Depository Participant or Indirect Participant or any other person, other than a
registered owner of a Series 2008 Bond as shown in the Bond Register, of any amount with respect to principal of,
premium, if any, or interest on, the Series 2008 Bonds, (d) any consent given by the Securities Depository as
registered owner, or (e) subject to Article III hereof, the selection by the Securities Depository or any Depository
Participant of any beneficial owners to receive payment if Series 2008 Bonds are redeemed in part. While in the
Securities Depository System, no person other than Cede & Co., or any successor thereto, as Securities Depository
Nominee for the Securities Depository, shall receive a Series 2008 Bond certificate with respect to any Series 2008
Bond. Upon delivery by the Securities Depository to the Trustee of written notice from the Securities Depository to
the effect that the Securities Depository has determined to substitute a new Security Depository Nominee in place of
Cede & Co., and subject to the provisions hereof with respect to the payment of interest by the mailing of checks or
drafts to the registered owners of Series 2008 Bonds at the close of business on the Record Date applicable to any
interest payment date, the name "Cede & Co." in this Series Resolution shall refer to such new Securities Depository
Nominee of the Securities Depository.
Section 216. Successor Securities Depository; Transfers Outside Book Entry Only System. In the
event that (a) the Trustee determines that the Securities Depository is incapable of discharging its responsibilities
described herein and in the Representation Letter, (b) the Representation Letter shall be terminated for any reason or
(c) the Corporation or the County determines that it is in the best interests of the beneficial owners of the Series
2008 Bonds that they be able to obtain certificated Series 2008 Bonds, the County shall (i) appoint a successor
securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as
amended, notify the Securities Depository and the DTC Participants of the appointment of such successor securities
depository and transfer one or more separate Series 2008 Bond certificates to such successor securities depository or
(ii) notify the Securities Depository of the availability through the Securities Depository of Series 2008 Bond
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certificates and transfer one or more separate Series 2008 Bond certificates to DTC Participants having Series 2008
Bonds credited to their Securities Depository accounts. In such event, the Series 2008 Bonds shall no longer be
restricted to being registered on the Bond Register in the name of Cede & Co., as nominee of the Securities
Depository but may be registered in the name of the successor security depository, or its nominee, in whatever name
or names registered owners of Series 2008 Bonds transferring or exchanging Series 2008 Bonds shall designate, in
accordance with the provisions hereof.
Section 217. Payments and Notices to Cede & Co. Notwithstanding any other provision of this Series
Resolution to the contrary, so long as any Series 2008 Bond is registered in the name of Cede & Co., as nominee of
the Securities Depository, all payments with respect to principal of, premium, if any, and interest on such Series
2008 Bond and all notices with respect to such Series 2008 Bond shall be made and given, respectively, in the
manner provided in the Representation Letter.
Section 218. Conditions Precedent to Initial Delivery of Series 2008 Bonds. The Series 2008 Bonds
shall be deposited with the Trustee for authentication, but before the Series 2008 Bonds shall be delivered by the
Trustee, there shall be filed with the Trustee the documents required by Section 208 of the Bond Order and the
following:
(a) a copy, duly certified by the Clerk to the Board of Commissioners of the County to be a true and
correct copy, of the Bond Order, this Series Resolution and the Fifth Amendment to the Lease Agreement;
(b) a copy, duly certified by the Secretary or Assistant Secretary of the Corporation to be a true and
correct copy, of the resolutions adopted by the Board of Trustees of the Corporation approving the execution,
delivery and performance of the Credit Facility Provider Agreement, the Remarketing Agreements, the Fifth
Amendment to Lease Agreement and approving this Series Resolution, the issuance and sale of the Series 2008
fonds and the Official Statement related to the Series 2008 Bonds;
(c) an Opinion of Counsel for the County to the effect that (i) the County or the Corporation has
obtained from such governmental authorities, boards, agencies, or commissions having jurisdiction over the Health
Care System all approvals, consents, authorizations, certifications, and other orders that are necessary for the
operation of the Health Care System that reasonably could have been obtained as of the date of delivery of the Series
2008 Bonds and that if further approvals, consents, authorizations, certifications, and orders are necessary for the
operation of the Health Care System such counsel has no reason to believe that the County or the Corporation will
not be able to obtain the same, when required, (ii) the Bond Order, this Series Resolution and all other resolutions
relating to the issuance of the Series 2008 Bonds have been duly adopted at meetings of the Board duly called and
held in accordance with law and at which quorums were present and acting throughout, and that the Bond Order, this
Series Resolution and such other resolutions remain in full force and effect and have not been amended or modified
in any respect, (iii) the form, terms, execution and issuance of the Series 2008 Bonds have been duly authorized, (iv)
the form and terms of the Bond Order and this Series Resolution for the Series 2008 Bonds have been duly
authorized, (v) the Credit Facility Provider Agreement and the Remarketing Agreements have been duly authorized,
executed and delivered, (vi) each of the Bond Order, this Series Resolution, the Fifth Amendment to Lease
Agreement, the Credit Facility Provider Agreement and the Remarketing Agreements constitutes a binding and valid
agreement of the County that is enforceable in accordance with its terms, (vii) no provision of the Bond Order, this
Series Resolution, the Fifth Amendment to Lease Agreement, the Credit Facility Provider Agreement or the
Remarketing Agreements violates any federal or North Carolina statutory or constitutional provision, including
without limitation, any provisions of the Act or results in or constitutes a default under or conflicts with any
agreement, indenture, or other instrument to which the County is a party or by which it maybe bound, or any current
order, rule, regulation, decree, or ordinance of any court, government, governmental authority or body having
jurisdiction over the County or its property, and of which she has knowledge after due inquiry, (viii) the adoption of
the Bond Order and this Series Resolution is not subject to any authorization, consent, approval, or review of any
governmental body, public officer, or regulatory authority required on the date of her opinion and not theretofore
obtained or effected, (ix) there is no litigation, proceeding, or governmental investigation pending or threatened
before any court or governmental agency or body challenging the validity of the Bond Order, this Series Resolution,
the Fifth Amendment to Lease Agreement, the Credit Facility Provider Agreement or the Remarketing Agreements
or the transactions contemplated therein, or of the Series 2008 Bonds, or the corporate existence or the boundaries of
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the County or the title of any of the officers of the County to their respective offices, and (x) all conditions precedent
to the delivery of the Series 2008 Bonds have been fulfilled;
(d) an Opinion of Counsel for the Corporation to the effect that (i) the County or the Corporation has
obtained from such governmental authorities, boards, agencies, or commissions having jurisdiction over the Health
Care System all approvals, consents, authorizations, certifications, and other orders that are necessary for the
operation of the Health Care System that reasonably could have been obtained as of the date of delivery of the Series
2008 Bonds and that if further approvals, consents, authorizations, certifications, and orders are necessary for the
operation of the Health Care System such counsel has no reason to believe that the County or the Corporation will
not be able to obtain the same, when required, (ii) the Bond Order, this Series Resolution and all other resolutions
relating to the issuance of the Series 2008 Bonds have been duly approved at meetings of the Board of Trustees of
the Corporation duly called and held in accordance with law and at which quorums were present and acting
throughout, (iii) the execution, delivery and performance of the Credit Facility Provider Agreement, the
Remarketing Agreements and the Fifth Amendment to Lease Agreement have been duly approved at meetings of the
Board of Trustees of the Corporation duly called and held in accordance with law and at which quorums were
present and acting throughout and constitute binding and valid agreements of the Corporation that are enforceable in
accordance with their terms, and (iv) there is no litigation, proceeding, or governmental investigation pending or
threatened before any court or governmental agency or body challenging the validity of the Bond Order, this Series
Resolution, the Credit Facility Provider Agreement, the Remarketing Agreements, the Fifth Amendment to Lease
Agreement or the transactions contemplated therein, or of the Series 2008 Bonds, or the corporate existence of the
Corporation or the title of any of the officers of the Corporation to their respective offices;
(e) an Opinion of Bond Counsel to the effect that the issuance of the Series 2008 Bonds has been duly
authorized, that the Series 2008 Bonds constitute valid and binding special obligations of the County in accordance
with their terms and that assuming compliance with the requirements of the Code and certain covenants in this
Series Resolution, under existing law interest on the Series 2008 Bonds is excluded from gross income for federal
income tax purposes and is exempt from North Carolina income taxes;
(f) a fully executed counterpart of the Credit Facility Provider Agreement;
(g) a fully executed copy of the Credit Facility; and
(h) evidence of compliance with Section 1201 of the Bond Order.
When the documents mentioned in Section 208 of the Bond Order and paragraphs (a) to (h), inclusive, of
this Section shall have been filed with the Trustee and when the Series 2008 Bonds shall have been executed and
authenticated as required by this Series Resolution and the Bond Order, the Trustee shall deliver the Series 2008
Bonds at one time to the State Treasurer for delivery to the Securities Depository, but only upon payment to the
Trustee of the purchase price of the Series 2008 Bonds.
Section 219. The Liquidity Facility. (A) Any Liquidity Facility shall be an obligation of the Liquidity
Facility Provider to pay, subject to the conditions set forth in the Liquidity Facility, to the Tender Agent upon
request made with respect to any Series 2008 Bonds that bear interest at the Daily Rate, the Weekly Rate or the
Term Rate and in accordance with the terms thereof:
(i) an amount not exceeding (and subject to reduction from time to time in
accordance with the terms of the Liquidity Facility) the aggregate principal amounts of such Series
2008 Bonds to pay the portion of the Purchase Price of such Series 2008 Bonds equal to the
principal amount of Series 2008 Bonds delivered or required to be delivered to the Tender Agent
for purchase; and
(ii) an amount equal to (and subject to reduction from time to time in accordance
with the terms of the Liquidity Facility) the interest to accrue on such Series 2008 Bonds for a
period at least equal to the maximum number of days between Interest Payment Dates in the Mode
currently in effect for such Series 2008 Bonds (34 days during the Daily Mode and the Weekly
23
Mode), computed at the Maximum Rate, to pay the portion of the Purchase Price equal to interest
on such Series 2008 Bonds delivered or required to be delivered to the Tender Agent for purchase.
The County and the Corporation are not required by this Series Resolution to provide a Liquidity Facility or Credit
Facility for the Series 2008 Bonds in the Auction Mode or Fixed Rate Mode.
(B) If at any time the County and the Corporation shall deliver to the Tender Agent (i) a Substitute
Liquidity Facility, (ii) an Opinion of Counsel stating that the delivery of such Substitute Liquidity Facility to the
Tender Agent is authorized under this Series Resolution and complies with the terms hereof, (iii) an Opinion of
Bond Counsel, (iv) one or more Opinions of Counsel addressed to the Trustee, to the effect that the Substitute
Liquidity Facility is a legal, valid and binding obligation of the Liquidity Facility Provider enforceable against the
Liquidity Facility Provider in accordance with its terms, except as limited by applicable reorganization, insolvency,
liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of the rights of
creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation,
readjustment of debt or other similar proceeding of or moratorium applicable to the obligor and by general
principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);
(v) if a rating or ratings on such Series 2008 Bonds shall be in effect on the date of such substitution, written
evidence from each rating agency then rating the Series 2008 Bonds of the ratings to be in effect following the
delivery of the proposed Substitute Liquidity Facility; (vi) prior written consent of the Local Government
Commission as to the proposed Substitute Liquidity Facility; and (vii) written evidence that notice of such
proposed substitution has been sent to the Owners prior to such substitution, then the Tender Agent shall, so long
as such Substitute Liquidity Facility shall contain administrative procedures which are acceptable to the Tender
Agent in its reasonable discretion, accept such Substitute Liquidity Facility and promptly surrender the existing
Liquidity Facility to the Liquidity Facility Provider.
(C) The County shall give at least forty-five (45) days written notice to the Trustee, the Tender Agent
and the Remarketing Agent of its intention to substitute such Substitute Liquidity Facility. The existing Liquidity
Facility shall not be surrendered or cancelled until after the occurrence of any mandatory tender of the Series 2008
Bonds for purchase.
(D) Any Substitute Liquidity Facility shall be either (i) a purchase agreement, letter of credit, surety
policy or other liquidity facility, or any combination thereof, with a term of at least 364 days, issued by one or
more commercial banks or savings and loan associations, insurance companies or other fmancial institutions,
provided that the Trustee or the Tender Agent shall not be the obligor on, or the issuer of, any such Substitute
Liquidity Facility.
(E) If a Liquidity Facility is in effect with respect to the Series 2008 Bonds, the Tender Agent shall
present all notices, drafts, demands and other documents required by such Liquidity Facility (in the manner therein
permitted and by the time required thereby) for the payment of funds thereunder (after taking into account funds
from remarketing then held by the Tender Agent) sufficient to pay on each Purchase Date or Mandatory Purchase
Date, the Purchase Price for the Series 2008 Bonds tendered or deemed to be tendered, but in every case only in
respect of Series 2008 Bonds which are Eligible Bonds, and deposit and apply the funds provided by the Liquidity
Facility Provider in the manner set forth in this Series Resolution.
(F) So long as the Series 2008 Bonds are in the Daily Mode, the Weekly Mode or the Term Rate
Mode, there shall be no termination or expiration of the Liquidity Facility Provider's obligations under any
Liquidity Facility without substitution of a Substitute Liquidity Facility or a Substitute Credit Facility.
(G) Separate Liquidity Facilities may be maintained for each Series of the Series 2008 Bonds,
provided that the requirements set forth herein for the Liquidity Facility are satisfied with respect to each Series of
the Series 2008 Bonds to the extent applicable.
(H) Upon and following the conversion of either Series of Series 2008 Bonds to the Fixed Rate Mode
or the Auction Mode, such Series 2008 Bonds shall no longer be (i) subject to tender for purchase or (ii) entitled to
any benefits of any Liquidity Facility. The Liquidity Facility shall terminate with respect to Series 2008 Bonds
24
converted to a Fixed Rate Mode or the Auction Mode on the day of such conversion following the payment of the
Purchase Price of all Series 2008 Bonds tendered for purchase on such Mode Change Date.
(I) The Liquidity Facility Provider must be rated at least "A-1" by S&P or VMIG-1 by Moody's. The
County at the direction of the Corporation shall maintain in effect a Liquidity Facility or a Credit Facility as long
as the Series 2008 Bonds remain in a variable rate Mode.
Section 220. The Credit Facility.
(A) So long as the Series 2008 Bonds are in the Daily Mode, the Weekly Mode or the Term Rate
Mode, the County and the Corporation may maintain a Credit Facility in lieu of a Liquidity Facility. RBC Bank
(USA) is providing the initial Credit Facility pursuant to which the Trustee will be permitted to draw for the
payment of the principal of the Series 2008 Bonds while in the Weekly Mode or the Daily Mode or the principal
component of the Purchase Price of the Series 2008 Bonds while in the Weekly Mode or the Daily Mode and for
the payment of interest on the Series 2008 Bonds or the interest component of the Purchase Price of the Series
2008 Bonds, in each case for a period not less than 34 days.
Separate Credit Facilities provided by the same Credit Facility Provider may be maintained for the Series
2008A Bonds and the Series 2008B Bonds, provided that the requirements set forth herein for the Credit Facility are
satisfied with respect to each Series of the Bonds to the extent applicable.
(B) If a Credit Facility for the Series 2008 Bonds is in effect, the Trustee is hereby directed, on or
before each Interest Payment Date, to make a drawing under such Credit Facility, in accordance with the terms of
the Credit Facility, no later than the time provided in such Credit Facility for presentations of drafts in order to
receive payment in immediately available funds by 1:00 p.m. on such date, equal to the interest on the Series 2008
Bonds then payable from such Credit Facility due on such Interest Payment Date (other than such interest
representing a portion of the Purchase Price of any Series 2008 Bonds required to be purchased on such date and
other than any interest due on Bank Bonds) and to use such drawing to pay such interest due on the Series 2008
Bonds on such Interest Payment Date. The proceeds of such drawing shall be deposited in the Bond Fund in a
separate account or subaccount separate and apart from any moneys not received pursuant to a draw on a Credit
Facility and held uninvested pending application to the payment of interest on such Series 2008 Bonds. In
determining the amount of any such interest then due, the Trustee shall not take into consideration any interest due
on any Series 2008 Bond for any period when such Series 2008 Bond is a Bank Bond or for any Series 2008 Bonds
owned by the County, the Corporation or any Affiliate of the County or the Corporation, and no drawings under
such Credit Facility shall be made, or be used to pay, interest on any Series 2008 Bond for any period when such
Series 2008 Bond is a Bank Bond or for any Series 2008 Bonds owned by the County, the Corporation or any
Affiliate of the County or the Corporation.
(C) If a Credit Facility for the Series 2008 Bonds is in effect, on or before each date on which a
payment of principal or redemption premium (if covered by such Credit Facility) is due either at maturity or as a
result of any mandatory, extraordinary or optional redemption of such Series 2008 Bonds, purchase in lieu of
redemption of such Series 2008 Bonds or any acceleration of the maturity of such Series 2008 Bonds or otherwise
(in each case, other than an amount representing the principal portion of the Purchase Price of any such Series
2008 Bonds required to be purchased on such date and other than any principal due on Bank Bonds), the Trustee is
hereby directed to make a drawing under such Credit Facility, in accordance with the terms of the Credit Facility,
no later than the time provided in such Credit Facility for presentations of drafts in order to receive payment in
immediately available funds by 1:00 p.m. on the date such principal or redemption premium (if covered by such
Credit Facility) is payable, equal to the amount of such principal or redemption premium payment and to use such
drawing to make such payment. The proceeds of such drawing shall be deposited in the Bond Fund in a separate
account or subaccount separate and apart from any moneys not received pursuant to a draw on a Credit Facility and
held uninvested pending application to the payment of the principal of and redemption premium (if covered by
such Credit Facility) on such Series 2008 Bonds. In determining the amount of such principal and redemption
premium then due, the Trustee shall not take into consideration any principal or redemption premium required on
Bank Bonds or for any Series 2008 Bonds owned by the County, the Corporation or any Affiliate of the County or
the Corporation, and no drawings under such Credit Facility shall be made or be used to pay any principal of or
25
redemption premium on Bank Bonds or for any Series 2008 Bonds owned by the County, the Corporation or any
Affiliate of the County or the Corporation.
(D) If a Credit Facility for the Series 2008 Bonds is in effect, on or before each day on which Series
2008 Bonds are tendered for purchase or required to be purchased pursuant to Sections 304, 305, 306, 307 or 308,
the Trustee is hereby directed to make a drawing under such Credit Facility, in accordance with the terms of the
Credit Facility, no later than the time provided in such Credit Facility for presentations of drafts in order to receive
payment in immediately available funds by 2:30 p.m. on said date, an amount equal to the Purchase Price of Series
2008 Bonds to be paid on such date, less the amount of moneys in the Remarketing Proceeds Account available to
pay such Purchase Price, and to use such drawing to make such payment. The proceeds of such drawing may be
paid directly to the Tender Agent or, if such proceeds are received by the Trustee, shall be transferred immediately
by the Trustee to the Tender Agent, for deposit in the Credit or Liquidity Facility Deposit Account, and held
uninvested pending application to the payment of the Purchase Price of such Series 2008 Bonds; provided,
however, that no drawings under such Credit Facility shall be made or be used to pay the Purchase Price of any
Bank Bonds or of any Series 2008 Bonds owned by the County, the Corporation or any Affiliate of the County or
the Corporation.
(E) The Trustee shall give notice by first-class mail to the Holders of the Series 2008 Bonds on or
before the 30th day preceding the expiration or termination of a Credit Facility in accordance with its terms or the
proposed replacement of such Credit Facility with a Substitute Liquidity Facility or a Substitute Credit Facility.
Such notice shall, to the extent applicable, (1) state the date of such expiration, termination or proposed
replacement of such Credit Facility, (2) state that the Series 2008 Bonds are subject to mandatory purchase as a
result of such expiration, termination or proposed replacement, (3) state the date on which such purchase will occur
pursuant to Section 307 and set forth the Purchase Price and the place of delivery for purchase of such Series 2008
Bonds, and (4) provide any other information required by Section 307. The County or the Corporation shall
provide the Trustee with written notice of any information required to enable the Trustee to give the foregoing
notice. The Trustee shall send a copy of the foregoing notice to the Local Government Commission, the County,
the Corporation, the Tender Agent, the Remarketing Agent and the Credit Facility Provider.
(F) Notice.
(1) The Corporation shall give notice to the Trustee, the Remarketing Agent, the Tender
Agent, the Credit Facility Provider and the Local Government Commission promptly upon the occurrence
of any of the following events:
(a) the extension of the Expiration Date;
(b) the proposed delivery of a Substitute Credit Facility or a Substitute Liquidity
Facility; and
(c) the appointment of a successor to any of the Credit Facility Provider, the
Remarketing Agent or the Tender Agent.
(2) Promptly upon receipt of notice from the Corporation of the occurrence of any of the
events listed is subparagraph (1) above, the Trustee shall give notice to the Holders of the Outstanding
Series 2008 Bonds of occurrence of such event.
Section 221. Substitute Credit Facility; Delivery of Credit Facility to Replace Liquidity Facility;
Surrender of Credit Facility.
(A) Prior to the expiration or termination of a Credit Facility in accordance with the terms of that
Credit Facility, the Corporation may provide for the delivery to the Trustee of a Substitute Credit Facility, which
has a term of at least 364 days. Any Substitute Credit Facility delivered to the Trustee pursuant to this Section
shall be delivered and become effective not later than 10 days prior to the date on which the former Credit Facility
terminates or expires and shall contain administrative provisions reasonably acceptable to the Trustee and the
26
Remarketing Agent. If there is delivered to the Trustee (i) a Substitute Credit Facility covering the Series 2008
Bonds, (ii) a Favorable Opinion of Bond Counsel, (iii) either (a) written evidence from each Rating Agency then
rating the Series 2008 Bonds, in each case to the effect that such Rating Agency has reviewed the proposed
Substitute Credit Facility and the ratings of the Series 2008 Bonds after substitution of such Substitute Credit
Facility will not result in a long-terns rating of below "A" and ashort-term rating below the highest short-term
rating category (without giving effect to any gradations within such category) from such Rating Agency or (b)
written evidence that the long-term debt and short-term debt of the provider of the proposed Substitute Credit
Facility is rated "A" or better and in the highest short-term rating category (without giving effect to any gradations
within such category), respectively, by S&P or Moody's, (iv) the legal opinion required by subsection (B) of this
Section, (v) the prior written consent of the Local Government Commission and (vi) if the Credit Facility then in
effect with respect to the Series 2008 Bonds does not cover premiums due on the Series 2008 Bonds, and the
Series 2008 Bonds would be subject to mandatory tender for purchase at a Purchase Price in excess of the principal
amount thereof plus accrued and unpaid interest thereon to but not including the date of purchase under Section
307(B), Available Moneys in an amount sufficient to pay the premium due on the Series 2008 Bonds, then the
Trustee shall accept such Substitute Credit Facility.
(B) (1) On or prior to the date of the delivery of the Substitute Credit Facility to the Trustee, the
County or the Corporation shall famish to the Trustee (a) if the Substitute Credit Facility is issued by a
Credit Facility Provider other than a domestic commercial bank, an Opinion of Counsel reasonably
satisfactory to the Local Government Commission, the Trustee, the Tender Agent and the Remarketing
Agent that no registration of the Substitute Credit Facility is required under the Securities Act of 1933, as
amended, and (b) an Opinion of Counsel reasonably satisfactory to the Local Government Commission, the
Trustee, the Tender Agent and the Remarketing Agent to the effect that such Substitute Credit Facility is a
valid and enforceable obligation of the issuer thereof.
(2) In lieu of the Opinion of Counsel required by clause (1) of this subsection, there may be
delivered an Opinion of Counsel reasonably satisfactory to the Local Government Commission, the
Trustee, the Tender Agent and the Remarketing Agent to the effect that either (i) the Series 2008 Bonds
will be offered, sold and held by Holders in transactions not constituting a public offering of the Series
2008 Bonds under the Securities Act of 1933, as amended, and accordingly no registration of the Series
2008 Bonds under the Securities Act of 1933, as amended, will be required in connection with the issuance
and delivery of the Substitute Credit Facility or the remarketing of the Series 2008 Bonds with the benefits
thereof or (ii) the offering and sale of the Series 2008 Bonds, to the extent evidencing the Substitute Credit
Facility, has been registered under the Securities Act of 1933, as amended, and any indenture required to be
qualified with respect thereto under the Trust Indenture Act of 1939, as amended, has been so qualified. If
the opinion described in clause (i) of this subparagraph (2) is given, the Series 2008 Bonds and any transfer
records relating to the Series 2008 Bonds shall be noted indicating the restrictions on sale and
transferability described in clause (i).
(3) If a Liquidity Facility is in effect with respect to the Series 2008 Bonds, a Credit Facility
covering the Series 2008 Bonds may be delivered to the Trustee if all of the conditions set forth in
subsections (1) and (2) of this Section regarding the delivery of a Substitute Credit Facility for the Series
2008 Bonds are satisfied.
(4) If a Substitute Credit Facility is delivered to the Trustee and accepted pursuant to this
Section or a Substitute Liquidity Facility is delivered to the Tender Agent and accepted pursuant to Section
219, then the Trustee shall surrender the existing Credit Facility for cancellation, provided that no Credit
Facility shall be surrendered until after the date on which Series 2008 Bonds required to be purchased
pursuant to Section 307 have been purchased or deemed purchased in accordance with Section 307. If a
Credit Facility terminates or is no longer required to be maintained hereunder, the Trustee shall surrender
such Credit Facility to the Credit Facility Provider for cancellation in accordance with the terms of the
Credit Facility; provided, however, that notwithstanding any other provision of this Series Resolution, the
Trustee may not surrender the existing Credit Facility, as applicable, until all conforming draws under the
existing Credit Facility have been honored and all such draws shall be made under the existing Credit
Facility. Upon the defeasance of the Series 2008 Bonds pursuant to Section 1001 and if, at such time, the
Series 2008 Bonds are no longer subject to tender for purchase, the Trustee shall surrender the Credit
27
Facility, if any, to the Credit Facility Provider for cancellation in accordance with the terms of the Credit
Facility. The Trustee shall comply with the procedures set forth in each Credit Facility relating to the
termination thereof and shall deliver any certificates reducing the stated amount of the Credit Facility in
accordance with the provisions thereof.
Section 222. Rights and Duties Under Credit Facility.
(A) If a Credit Facility is in effect, the Trustee is hereby instructed, without further direction, to draw
amounts under the Credit Facility in accordance with the terms and conditions set forth herein at the times, in the
manner and for the purposes set forth in this Series Resolution. If the Trustee makes a drawing under the Credit
Facility relating to the Series 2008 Bonds after the principal of the Series 2008 Bonds has been declared
immediately due and payable following the occurrence of an Event of Default with respect to the Series 2008
Bonds, the proceeds of such drawing shall be applied by the Trustee immediately to the payment of the Series
2008 Bonds entitled to be paid therefrom. So long as the Credit Facility remains in effect with respect to any
Series 2008 Bonds, the Trustee may not waive an Event of Default with respect to the Series 2008 Bonds without
the consent of the Credit Facility Provider. The County agrees that the Trustee, in its name may enforce all rights
of the Trustee and all obligations of the Credit Facility Provider (including the obligation of the Credit Facility
Provider to honor drafts duly presented in accordance with the terms and conditions of the Credit Facility) under
and pursuant to the Credit Facility for the benefit of the Holders of the Series 2008 Bonds. The Trustee agrees to
assume and perform the duties and obligations contemplated under the Credit Facility to be assumed and
performed by the Trustee.
(B) If the Series 2008 Bonds are redeemed in whole or in part, the Trustee shall give notice to the
Credit Facility Provider in the manner required by the Credit Facility to reflect such reduction in the principal
amount of the Series 2008 Bonds as a result of such redemption.
(C) So long as the Credit Facility is in effect and the Credit Facility Provider has not wrongfully
dishonored any draw under the Credit Facility (any dishonor for a reason permitted by the Credit Facility or
pursuant to any administrative or judicial order, ruling, fmding or decision shall not be deemed "wrongful" for
purposes hereof), the consent of the Credit Facility Provider will be required to amend, modify or supplement this
Series Resolution.
Section 223. Credit Faci[iry Provider Deemed Owner. For all purposes of this Article II (other than
receipt of payments) and the Bond Order, the Credit Facility Provider shall, so long as the Credit Facility shall be in
effect and the Credit Facility Provider shall not have wrongfully dishonored any draw under the Credit Facility (any
dishonor for a reason permitted by the Credit Facility or pursuant to any administrative or judicial order, ruling,
finding or decision shall not be deemed "wrongful" for purposes hereof), be deemed the Holder and registered
owner of all Series 2008 Bonds. As such, the Credit Facility Provider may take all actions permitted by this Article
II and the Bond Order to be taken by the Holders or registered owners of the Series 2008 Bonds, to the exclusion of
the actual Holders and registered owners of the Series 2008 Bonds; the purpose of this Section 223 being to permit
the Credit Facility Provider to direct the taking of actions and enforcement of remedies permitted by this Series
Resolution so long as the Credit Facility shall be in effect and the Credit Facility Provider shall not have wrongfully
dishonored any draw under the Credit Facility.
Section 224. Subrogation Rights of the Credit Facility Provider. Notwithstanding anything else
contained herein, whenever the Trustee shall make any payment to any Bondholder with funds drawn under the
Credit Facility pursuant hereto, the Trustee shall make such payments as agent for the Credit Facility Provider and
not as agent for the County or the Corporation, and the Credit Facility Provider and its assigns shall thereafter, to the
extent of the amount so paid, be subrogated to the rights thereon of the Bondholders to whom such payment was
made, and the Trustee shall, in the event of the payment of principal, keep a written record of such payments. When
a Bondholder has been paid the entire principal of and interest on his Series 2008 Bond with funds drawn under the
Credit Facility, such Series 2008 Bond shall be surrendered to the Trustee as agent for the Credit Facility Provider,
in lieu of cancellation thereof, and such Series 2008 Bond shall be transferred and delivered to the Credit Facility
Provider or as the Credit Facility Provider shall direct.
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In the event the Credit Facility Provider makes any payment with respect to the payment of the principal or
purchase price of or interest on any Series 2008 Bond to the Trustee under the Credit Facility, the Credit Facility
Provider shall be subrogated to the rights possessed under this Series Resolution and in and to the Project Fund by
the Trustee and the Holders of such Series 2008 Bonds so paid, and the Credit Facility Provider shall be subrogated
to the rights of the Trustee under any other document, instrument or agreement securing repayment of the principal
or purchase price of and interest on the Series 2008 Bonds, including in particular the Bond Order. For purposes of
the Credit Facility Provider's subrogation rights hereunder, (i) any reference in this Series Resolution to the
Bondholders shall include the Credit Facility Provider, which shall be entitled to be treated as if the Credit Facility
Provider were a registered owner of the Series 2008 Bonds in the principal amount of any principal payment made
by the Credit Facility Provider under the Credit Facility, (ii) any portion of any Series 2008 Bond as to which the
principal or purchase price is paid with money collected pursuant to the Credit Facility shall be deemed to be
outstanding under this Series Resolution and the principal amount of such Series 2008 Bond, together with interest
due and unpaid thereon, which shall have been paid by the Credit Facility Provider pursuant to the Credit Facility
shall be deemed to be held by and owing to the Credit Facility Provider, and (iii) the Credit Facility Provider may
exercise any and all rights and benefits it would have under this Series Resolution as a Holder of the Series 2008
Bonds to the extent of the principal amount of Series 2008 Bonds owned or deemed to be owned by the Credit
Facility Provider and any and all interest so due and unpaid thereon; provided that such Series 2008 Bonds (A) shall
not be taken into account in determining any deficiency for which a claim or draw is to be made under the Credit
Facility, and (B) shall be subordinated in right of payment as of any Interest Payment Date or upon the redemption
or acceleration of the Series 2008 Bonds. Subrogation rights granted to the Credit Facility Provider hereunder are
not intended to be exclusive of any other rights or remedies available to the Credit Facility Provider, and such
subrogation rights shall be cumulative and shall be in addition to every right or remedy given hereunder or under
any other instrument or agreement with respect to reimbursement of money paid by the Credit Facility Provider
pursuant to the Credit Facility, and every other right or remedy now or hereafter existing at law or in equity or by
statute.
ARTICLE III.
REDEMPTION, TENDER AND PURCHASE OF BONDS
Section 301. Redemption Dates and Prices.
(A) Optional and Extraordinary Redemption. The Series 2008 Bonds are subject to redemption by the
County at the direction of the Corporation in whole or in part on any date at a Redemption Price equal to 100% of
the principal amount thereof, without premium, plus accrued interest to the Redemption Date, to the extent
available from Net Proceeds (as defined in the Bond Order) resulting from insurance carried or maintained with
respect to the Health Care System as required by clauses (ii) and (v) of Section 608(a) of the Bond Order, and Net
Proceeds resulting from Eminent Domain (as defined in the Bond Order) proceedings, pursuant to Section 609 of
the Bond Order, to the extent such Net Proceeds exceed 10% of Net Book Value (as defined in the Bond Order).
The Series 2008 Bonds are also subject to mandatory redemption in whole only on any date to the extent available
from money deposited by the Corporation in the Redemption Fund at a Redemption Price equal to 100% of the
principal amount thereof, without premium, plus accrued interest to the Redemption Date in the event that, by
reason of any change in any federal or State law or of any legislative, administrative or judicial action or
administrative failure of action, (i) the Lease becomes unenforceable or impossible to perform without
unreasonable delay or (ii) unreasonable burdens or excessive liabilities are imposed on the County or the
Corporation, including, without limitation, the imposition of federal, state or other ad valorem property, income or
other taxes not being imposed on the date of the Lease.
(B) Terms of Redemption.
(1) Optional Redemption of Series 2008 Bonds in the Daily Mode or the Weekly Mode.
Series 2008 Bonds in the Daily Mode or the Weekly Mode are subject to redemption prior to their Maturity
Date, by the County at the direction of the Corporation, in whole on any date or in part on any Interest
29
Payment Date (and in any Authorized Denomination) at a Redemption Price equal to 100% of the principal
amount of Series 2008 Bonds called for redemption, without premium, together with accrued interest, if
any, from the end of the preceding Interest Period to the Redemption Date.
Mode.
(2) Optional Redemption of Series 2008 Bonds in the Term Rate Mode or the Fixed Rate
(a) The Series 2008 Bonds in a Term Rate Mode are subject to redemption prior to
the Maturity Date by the County, at the direction of the Corporation, in whole or in part on their Purchase
Date at a Redemption Price equal to 100% of the principal amount of the Series 2008 Bonds called for
redemption, without premium, together with accrued interest, if any, to the Redemption Date.
(b) In addition to the redemption provision described in (a) above, Series 2008
Bonds in a Tenn Rate Mode or the Fixed Rate Mode are subject to redemption by the County, at the
direction of the Corporation, in whole on any date or in part on any Interest Payment Date at the
Redemption Prices set forth below, together with accrued interest, if any, to the Redemption Date:
LENGTH OF INTEREST
PERIOD
Greater than or equal to
15 years
COMMENCEMENT OF
REDEMPTION PERIOD
Tenth anniversary of the
commencement of Interest
Period
REDEMPTION PRICE
100% or such alternate Redemption
Price up to a maximum of 101%
("Alternate Redemption Price"),
provided that a Favorable Opinion of
Bond Counsel is delivered with
respect to the establishment of such
Alternate Redemption Price
Less than 15 years and Seventh anniversary of the 100% or an Alternate Redemption
greater than or equal to commencement of Interest Price, provided that a Favorable
10 years Period Opinion of Bond Counsel is
delivered with respect to the
establishment of such Alternate
Redemption Price
Less than 10 years and
greater than or equal to
5 years
Third anniversary of the
commencement of Interest
Period
100% or an Alternate Redemption
Price, provided that a Favorable
Opinion of Bond Counsel is
delivered with respect to the
establishment of such Alternate
Redemption Price
Less than 5 years
Series 2008 Bonds not subject
to optional redemption
pursuant to this subparagraph
(b)
Not Applicable
In connection with a conversion to a Term Rate Mode or the Fixed Rate Mode, the County, at the discretion of the
Corporation, may waive or otherwise alter its rights to direct the redemption of the Series 2008 Bonds at any time
without premium; provided that notice describing the waiver or alteration shall be submitted to the Paying Agent (if
any), the Trustee and the Remarketing Agent (if any), together with a Favorable Opinion of Bond Counsel,
addressed to them.
(3) Optional Redemption of Series 2008 Bonds in the Auction Mode. Series 2008 Bonds in
the Auction Mode are subject to redemption prior to the Maturity Date, at the option of the County with the
consent of the Corporation, in whole or in part on any Interest Payment Date, at a Redemption Price equal
30
to the principal amount of the Series 2008 Bonds called for redemption, without premium, together with
accrued interest, if any, to the Redemption Date.
(4) Mandatory Redemption of Bank Bonds. The County shall redeem Bank Bonds that are
subject to mandatory redemption pursuant to the Liquidity Facility or the Credit Facility at the time or
times required by the Liquidity Facility or the Credit Facility at a Redemption Price of 100% of the
principal amount of Bank Bonds to be redeemed plus accrued interest, if any, to the Redemption Date. The
Bank Bonds shall be redeemed by the Trustee pursuant to the provisions of this subsection without any
notice from or direction by the County or the Corporation; it being understood and agreed, however, that
only Bank Bonds held by the Liquidity Facility Provider or the Credit Facility Provider shall be redeemed
pursuant to this Section 301(B)(4).
(5) Sinking Fund Account Redemption. Series 2008 Bonds are redeemable pursuant to the
Sinking Fund Account in the manner provided in Section 302 hereof.
(6) Minimum Redemption Amount. No redemption (other than a redemption under Section
301(B)(4) hereof) of less than all of the Series 2008 Bonds of a Series at the time outstanding shall be made
pursuant to the provisions of Section 301 unless (i) the aggregate principal amount of such Series 2008
Bonds to be redeemed is equal to or greater than $100,000, (ii) the Series 2008 Bonds are redeemed in
Authorized Denominations and (iii) the Series 2008 Bonds that remain outstanding after such redemption
are held in Authorized Denominations.
(C) Notice to Trustee. Series 2008 Bonds may be called for redemption by the Trustee pursuant to
this Section 301 upon receipt by the Trustee of a written request of the County requesting such redemption, with
respect to Series 2008 Bonds prior to the conversion thereof to the Fixed Rate Mode, at least 20 days prior to the
Redemption Date and, after the conversion of the Series 2008 Bonds to be redeemed to the Fixed Rate Mode, at
least 45 days prior to the Redemption Date. Such written request shall specify the principal amount of the Series
2008 Bonds to be called for redemption, the applicable Redemption Price or Prices and the provision or provisions
above specified pursuant to which such Series 2008 Bonds are to be called for redemption.
(D) Purchase in Lieu of Redemption. In lieu of redeeming Series 2008 Bonds pursuant to this Section
301, the Trustee may, at the request of the County, upon the direction of the Corporation, use such funds otherwise
available hereunder for redemption of Series 2008 Bonds to purchase Series 2008 Bonds identified by the County,
upon the direction of the Corporation, at a price specified by the County, upon the direction of the Corporation, not
exceeding the Redemption Price then applicable hereunder. In the case of any optional or extraordinary
redemption or any purchase and cancellation of Series 2008 Bonds, the Trustee shall apply as a credit against the
required Sinking Fund Account deposits with respect to such term bonds the amount of such term bonds in such
order as the County, upon the direction of the Corporation, elects in writing prior to such optional or extraordinary
redemption or purchase and cancellation or, if no election is made, in the inverse order thereof. The Trustee shall
cancel all such Series 2008 Bonds purchased pursuant to this Section 301(D).
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Section 302. Sinking Fund Account; Redemption of Series 2008 Bonds.
(A) The Series 2008A Bonds shall be redeemed pursuant to mandatory sinking fund redemption on the
first Business Day of October in the following years and amounts at a Redemption Price equal to 100% of the
principal amount of such Series 2008A Bonds to be redeemed, plus accrued interest to the Redemption Date:
Year Principal Year Principal
Amount Amount
2009 $335,000 2024 $640,000
2010 370,000 2025 670,000
2011 385,000 2026 695,000
2012 400,000 2027 725,000
2013 415,000 2028 750,000
2014 435,000 2029 785,000
2015 450,000 2030 815,000
2016 465,000 2031 845,000
2017 485,000 2032 880,000
2018 505,000 2033 915,000
2019 525,000 2034 955,000
2020 550,000 2035 995,000
2021 570,000 2036 1,035,000
2022 595,000 2037 1,075,000
2023 615,000 2038 1,120,000
(B) The Series 2008B Bonds shall be redeemed pursuant to mandatory sinking fund redemption on the
first Business Day of October in the following years and amounts at a Redemption Price equal to 100% of the
principal amount of such Series 2008E Bonds to be redeemed, plus accrued interest to the Redemption Date:
Year Principal Year Principal
Amount Amount
2009 $335,000 2024 $640,000
2010 370,000 2025 670,000
2011 385,000 2026 695,000
2012 400,000 2027 725,000
2013 415,000 2028 750,000
2014 435,000 2029 785,000
2015 450,000 2030 815,000
2016 465,000 2031 845,000
2017 485,000 2032 880,000
2018 505,000 2033 915,000
2019 525,000 2034 955,000
2020 550,000 2035 995,000
2021 570,000 2036 1,035,000
2022 595,000 2037 1,075,000
2023 615,000 2038 1,120,000
Notwithstanding the foregoing, when any Series 2008 Bonds in the Auction Mode are to be redeemed by
mandatory sinking fund redemption as described above, if such October I is not an Interest Payment Date for the
Auction Mode, then the mandatory Sinking Fund Account redemption shall occur on the Interest Payment Date
immediately preceding such October 1.
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The amounts referred to in this Section 302 shall be reduced (i) by the amount of Series 2008 Bonds
acquired and delivered in accordance with Section 504 hereof in satisfaction of such Sinking Fund Account
requirements and (ii) in connection with a partial redemption of Series 2008 Bonds if the Corporation elects to
reduce mandatory Sinking Fund Account redemptions for the Series 2008 Bonds in the manner provided in Section
302(D) hereof. Payment or redemption of the Series 2008 Bonds through the Sinking Fund Account shall be
without premium. The Series 2008 Bonds shall be redeemed by the Trustee pursuant to the provisions of this
paragraph without any notice from or direction by the County or the Corporation.
(C) Prior to each conversion of any of the Series 2008 Bonds to the Fixed Rate pursuant to Section
207 hereof, and no later than the Rate Determination Date, the Remarketing Agent shall, with the prior approval of
the Local Government Commission, deliver to the Trustee, the County and the Corporation a certificate that
allocates the payments of principal due through the Sinking Fund Account for that Series, described above in
Section 301(A), specifying which of the October payments will be payable by maturity, and which will be payable
by call for mandatory Sinking Fund Account redemption, and specifying the interest rate payable on each payment
of principal. In determining the principal maturities, mandatory Sinking Fund Account redemption payments and
interest rates for converted Series 2008 Bonds, the Remarketing Agent shall use the following guidelines:
(1) The Remarketing Agent shall allocate the converted Series 2008 Bonds between serial
bonds and term bonds in such manner as shall produce the lowest aggregate interest payable with respect
to the converted Series 2008 Bonds; and
(2) The Remarketing Agent shall set the interest rate on each converted Series 2008 Bond of
a particular Series, if any, and maturity at the lowest interest rate that will enable such Series 2008 Bond
upon conversion to be remarketed on the first day of the Fixed Rate Period, as the case may be, at the
Purchase Price taking into account the maturity of such Series 2008 Bond and the Sinking Fund Account
payments, if any, to be made with respect to converted Series 2008 Bonds of such maturity.
The foregoing notwithstanding, the County at the direction of the Corporation and with the prior approval
of the Local Government Commission, may agree to another method for providing for payment of principal on the
Series 2008 Bonds after a Fixed Rate Mode Change Date if there is delivered to the Trustee, the Local Government
Commission, the County, and the Corporation a Favorable Opinion of Bond Counsel to the effect that utilization of
such other method will not adversely affect the validity or enforceability in accordance with their terms of any
Series 2008 Bonds or any exemption from federal income taxation to which the interest on the Series 2008 Bonds
would otherwise be entitled.
Section 303. Notice of Redemption; Selection of Series 2008 Bonds for Redemption; and
Cancellation.
(A) Not less than thirty (30) days but not more than sixty (60) days before the redemption date of any
Series 2008 Bonds, whether such redemption be in whole or in part, the Trustee shall cause a notice of any
redemption signed by the Trustee to be mailed, postage prepaid, to all Holders owning Series 2008 Bonds to be
redeemed in whole or in part provided that notice to the Securities Depository shall be sent in accordance with the
Securities Depository's policies and procedures. Failure to mail any such notice to any Holder or any defect in any
notice so mailed shall not affect the validity of the proceedings for the redemption of the Series 2008 Bonds of any
other Holders to whom notice was properly given. Each such notice shall set forth: the CUSIP numbers and bond
certificate numbers of the Series 2008 Bonds to be redeemed, the interest rate of the Series 2008 Bonds to be
redeemed, the Date of Original Issuance of the Series 2008 Bonds to be redeemed, the Redemption Date, the
Redemption Price to be paid, for Series 2008 Bonds bearing interest in the Auction Mode, the publication date
established by the Securities Depository and acceptable to the Auction Agent, the maturities of the Series 2008
Bonds to be redeemed and, in the case of Series 2008 Bonds to be redeemed in part only, the portion of the
principal amount thereof to be redeemed, the address and telephone number of the Trustee, the date of the
redemption notice, and that on the Redemption Date the Series 2008 Bonds called for redemption will be payable
at the principal corporate trust office of the Trustee, that from that date interest will cease to accrue and be payable
and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the
Series 2008 Bonds. If any Series 2008 Bond is to be redeemed in part only, the notice of redemption shall state
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also that on or after the Redemption Date, upon surrender of such Series 2008 Bond, a new Series 2008 Bond in
principal amount equal to the unredeemed portion of such Series 2008 Bond will be issued.
Any notice of redemption, except a notice of redemption in respect of a mandatory sinking fund
redemption, at the direction of the Corporation, may state that the redemption to be effected is conditioned upon the
receipt by the Trustee on or prior to the Redemption Date of moneys sufficient to pay the principal of and premium,
if any, and interest on the Series 2008 Bonds or portions thereof to be redeemed, and if such moneys are not so
received, such notice shall be of no force or effect and such Series 2008 Bonds shall not be required to be redeemed.
In the event that such notice contains such a condition and moneys sufficient to pay the principal of and premium, if
any, and interest on such Series 2008 Bonds are not received by the Trustee on or prior to the Redemption Date, the
redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in
which the notice of redemption was given, that such moneys were not so received.
At least 30 days before the Redemption Date, such notice shall also be given by (i) registered or certified
mail, postage prepaid, or (ii) overnight delivery service to at least two of the following services selected by the
Trustee:
(1) Financial Information, Inc.'s Daily Called Bond Service, 30 Montgomery Street, 10~'
floor, Jersey City, New Jersey 07302, Attention: Editor;
(2) Kenny Information Service's Called Bond Service, 55 Broad Street, 28~' Floor, New
York, New York 10004;
(3) Moody's Called Bond Record, 7 World Trade Center at 250 Greenwich Street, 23`d Floor,
New York, New York 10007, Attention: Southern Regional Ratings; and
(4) Standard & Poor's Called Bond Record, 55 Water Street, New York, New York 10009.
In addition, at least 30 days before the Redemption Date, such notice shall be given by first class mail,
postage prepaid, to the Local Government Commission.
Neither failure to receive any such notice nor any defect in any such notice so given to the redemption
services and the Local Government Commission shall affect the sufficiency of the proceedings for the redemption of
such Series 2008 Bonds.
Notice of redemption of Series 2008 Bonds shall be given by the Trustee, at the expense of the
Corporation, for and on behalf of the County.
(B) The Series 2008 Bonds shall be redeemed only in Authorized Denominations. If less than all of a
Series of the Series 2008 Bonds, as the case may be, shall be called for redemption, the Trustee shall select such
Series 2008 Bonds to be redeemed by lot; provided, however, that following such redemption no Series 2008 Bond
shall be outstanding in a denomination other than an Authorized Denomination; and provided further that so long
as the sole Owner of a Series of the Series 2008 Bonds, as the case may be, is the Securities Depository Nominee,
such selection shall be made by the Securities Depository; and provided further that the Bank Bonds or the Pledged
Bonds of each Series shall be redeemed prior to any other Series 2008 Bonds of such Series.
(C) If less than all of a Series 2008 Bond is selected for redemption, the Owner thereof shall present
and surrender such Series 2008 Bond to the Trustee for payment of the principal amount thereof so called for
redemption, and the redemption premium, if any, on such principal amount, and the County shall, if necessary,
execute and the Trustee shall authenticate and deliver to or upon the order of such Owner, without charge, for the
unredeemed portion of the principal amount of the Series 2008 Bond so surrendered, a new Series 2008 Bond of
the same maturity and designation, bearing interest at the same rate of any Authorized Denominations.
(D) Series 2008 Bonds presented and surrendered in accordance with the provisions of this Section
shall be canceled upon the surrender thereof.
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(E) On or before the date upon which Series 2008 Bonds are to be redeemed, the County shall deposit,
or cause to be deposited, with the Trustee money or Government Obligations, or a combination of both, that will
be sufficient to pay on the Redemption Date the Redemption Price of, and interest accruing on, the Series 2008
Bonds or portions thereof to be redeemed on such Redemption Date.
On or before the date upon which Series 2008 Bonds are to be redeemed, the County shall deposit, or cause
to be deposited, with the Trustee money or Defeasance Obligations, or a combination of both, that will be sufficient
to pay on the Redemption Date the Redemption Price of, and interest accruing on, the Series 2008 Bonds or portions
thereof to be redeemed on such Redemption Date.
On the Redemption Date, notice having been given in the manner and under the conditions hereinabove
provided, the Series 2008 Bonds or portions thereof called for redemption shall be due and payable at the
Redemption Price provided therefor, plus accrued interest to such date (except in the case of a conditional
redemption authorized by Section 303(A) if moneys are not so available), and if moneys sufficient to pay the
Redemption Price of the Series 2008 Bonds or portions thereof to be redeemed plus accrued interest thereon to the
Redemption Date are held by the Trustee in trust for the owners of the Series 2008 Bonds or portions thereof to be
redeemed, interest on the Series 2008 Bonds or portions thereof called for redemption shall cease to accrue on such
Redemption Date; such Series 2003 Bonds or portions thereof shall cease to be entitled to any benefits or security
under the Bond Order Indenture or this Series Resolution or to be deemed Outstanding; and the owners of such
Series 2008 Bonds or portions thereof shall have no rights in respect thereof except to receive payment of the
Redemption Price thereof, plus accrued interest to the Redemption Date.
(F) Notwithstanding anything in this Section to the contrary, if a Credit Facility is in effect, then
unless the Credit Facility Provider has failed to honor a proper drawing under the Credit Facility (and such failure
remains uncured), no notice of redemption pursuant to Section 303(A) shall be given by the Trustee until (i) there
has been deposited with the Trustee moneys in an amount sufficient to reimburse the Credit Facility Provider in
accordance with the terms of the Credit Facility Provider Agreement then in effect for the amount of any draw
which is permitted to be made, if any, on the Credit Facility in connection with such redemption, or (ii) the Trustee
has received written consent from the Credit Facility Provider to such optional redemption and, if not otherwise
permitted under the Credit Facility, to draw on the Credit Facility in connection with such redemption.
Section 304. Optional Tenders of Series 2008 Bonds in the Daily Mode or the Weekly Mode. The
Holders of Eligible Bonds in a Daily Mode or a Weekly Mode may elect to have their Series 2008 Bonds (or
portions of those Series 2008 Bonds in amounts equal to integral multiples of the lowest then applicable Authorized
Denomination) purchased on any Business Day at a price equal to the Purchase Price,
(i) in the case of Series 2008 Bonds in the Daily Mode, upon delivery of an
irrevocable telephonic notice of tender to the Remarketing Agent and the Tender Agent not later
than 10:00 a.m. New York City time on the Purchase Date specified by the Holder; and
(ii) in the case of Series 2008 Bonds in the Weekly Mode, upon delivery of an
irrevocable written notice of tender or irrevocable telephonic notice of tender to the Remarketing
Agent and the Tender Agent, promptly confirmed in writing to the Tender Agent, not later than
4:00 p.m. New York City time on a Business Day not less than 7 days before the Purchase Date
specified by the Holder in such notice.
Such notices of tender shall state the CUSIP number, Series, Series 2008 Bond number (if the Series 2008
Bond is not registered in the name of the Securities Depository) and the principal amount of the portion of such
Bond to be optionally tendered and that such portion shall be purchased on the Purchase Date specified above.
Payment of the Purchase Price shall be made pursuant to this Section 304 only if the Series 2008 Bond so delivered
to the Tender Agent conforms in all respects to the description thereof in the notice described in this Section 304. A
Holder who gives the notice of tender as set forth above may repurchase the Series 2008 Bonds so tendered on such
Purchase Dates if the Remarketing Agent agrees to sell the Series 2008 Bonds so tendered to such Holder. If such
Holder decides to repurchase such Series 2008 Bonds and the Remarketing Agent agrees to sell the specified Series
35
2008 Bonds to such Holder, the delivery requirements set forth in Section 310(D) shall be waived. The Tender
Agent may assume that a Series 2008 Bond is an Eligible Bond unless it has actual knowledge to the contrary.
Section 305. Mandatory Purchase at End of Interest Period for Term Rate Mode. Series 2008
Bonds in the Term Rate Mode are subject to mandatory purchase on the Purchase Date for the current Interest
Period at the Purchase Price. The Trustee shall give notice by first-class mail, postage prepaid, of such mandatory
purchase to the Holders of such Series 2008 Bonds no less than 30 days prior to the Mandatory Purchase Date. The
notice shall state the Mandatory Purchase Date, the Purchase Price and that interest on such Series 2008 Bonds shall
cease to accrue from and after the Mandatory Purchase Date. The failure to give such notice with respect to any
Series 2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008 Bond with respect
to which notice was so given. Any notice properly sent will be conclusively presumed to have been given, whether
or not actually received by any Holder.
Section 306. Mandatory Purchase on Mode Change Date. (A) Series 2008 Bonds to be changed
from one Mode to another Mode (other than a change to the Fixed Rate Mode, which Series 2008 Bonds are subject
to mandatory purchase pursuant to subsection (B) of this Section 306) are subject to mandatory purchase on the
Mode Change Date at the Purchase Price. The Trustee shall give notice by first-class mail, postage prepaid, of such
mandatory purchase to the Holders of such Series 2008 Bonds no less than 15 days prior to the Mandatory Purchase
Date. The notice shall state the Mandatory Purchase Date, the Purchase Price and that interest on such Series 2008
Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure to give such notice with
respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008
Bond with respect to which notice was so given. Any notice properly sent will be conclusively presumed to have
been given, whether or not actually received by any Holder.
(B) Series 2008 Bonds to be changed to the Fixed Rate Mode are subject to mandatory purchase on
the Mode Change Date at the Purchase Price (subject to the provisions of Section 207 hereof). The Trustee shall
give notice by first-class mail, postage prepaid of such mandatory purchase as part of the notice, of change of
Mode to be sent to Holders pursuant to Section 210(B)(2). The failure to give such notice with respect to any
Series 2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008 Bond with
respect to which notice was so given. Any notice properly sent will be conclusively presumed to have been given,
whether or not actually received by any Holder.
Section 307. Mandatory Purchase on Expiration Date, Substitute Liquidity Facility Date and
Substitute Credit Facility Date and Termination of Liquidity Facility and Credit Facility. (A) On each Substitute
Liquidity Facility Date and Substitute Credit Facility Date, and on the second Business Day preceding each
Expiration Date, if such Series 2008 Bond is an Eligible Bond it shall be subject to mandatory purchase on such date
at the Purchase Price. The Trustee shall give notice of such mandatory purchase by mail to the Holders of the Series
2008 Bonds involved no less than 10 days prior to such Mandatory Purchase Date. The notice shall state the
Mandatory Purchase Date, the Purchase Price and that interest on such Series 2008 Bonds shall cease to accrue from
and after the Mandatory Purchase Date. The failure to give such notice with respect to any Series 2008 Bond shall
not affect the validity of the mandatory purchase of any other Series 2008 Bond with respect to which notice was so
given. Any notice mailed will be conclusively presumed to have been given, whether or not actually received by
any Holder.
(B) On the second Business Day preceding each Notice Termination Date applicable to a Series 2008
Bond, if such Series 2008 Bond is an Eligible Bond it shall be subject to mandatory purchase on such date at the
principal amount thereof, plus accrued interest, if any, with respect thereto to the Notice Termination Date. The
Tender Agent shall give notice of such mandatory purchase by first-class mail, postage prepaid, to the Holders of
the Series 2008 Bonds no later than the Business Day after receipt of a notice of termination from the Liquidity
Facility Provider. The notice shall state the Mandatory Purchase Date, the Purchase Price and that interest on such
Series 2008 Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure to give such
notice with respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of any other
Series 2008 Bond with respect to which notice was so given. Any notice mailed will be conclusively presumed to
have been given, whether or not actually received by any Holder.
36
(C) No mandatory purchase shall occur as a result of the occurrence of an Immediate Termination
Date. If the Tender Agent shall receive notice of the occurrence of an Immediate Termination Date, then it shall
cause the Trustee to notify the Local Government Commission and the Holders within one Business Day following
its receipt of such notice that an Immediate Termination Date has occurred.
(D) The Tender Agent may assume that a Series 2008 Bond is an Eligible Bond unless it has actual
knowledge that such Series 2008 Bond is not an Eligible Bond.
Section 308. Mandatory Purchase at Direction of the Corporation or the Credit Facility Provider.
(A) So long as the Series 2008 Bonds are in the Daily Mode or the Weekly Mode, the Series 2008
Bonds are subject to mandatory purchase on any Business Day designated by the Corporation, with the written
consent of the Remarketing Agent and the Liquidity Facility Provider or the Credit Facility Provider at the
Purchase Price, payable in immediately available funds. Such purchase date shall be a Business Day not earlier
than the 10th day following the second Business Day after receipt by the Trustee of written notice of such
designation. The Trustee shall give notice by first-class mail, postage prepaid, of such mandatory purchase to the
Holders of such Series 2008 Bonds no less than 15 days prior to the Mandatory Purchase Date. The notice shall
state the Mandatory Purchase Date, the Purchase Price and that interest on such Series 2008 Bonds shall cease to
accrue from and after the Mandatory Purchase Date. The failure to give such notice with respect to any Series
2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008 Bond with respect to
which notice was so given. Any notice properly sent will be conclusively presumed to have been given, whether
or not actually received by any Holder.
(B) If a Credit Facility is in effect, the Series 2008 Bonds are subject to mandatory purchase at the
Purchase Price, payable in immediately available funds, on the fourth Business Day after receipt by the Trustee of
a written notice from the Credit Facility Provider that an "event of default" under the Credit Facility Provider
Agreement has occurred and is continuing and a written request from the Credit Facility Provider that all of the
Series 2008 Bonds be required to be tendered for purchase. The Trustee shall give notice by first-class mail,
postage prepaid, of such mandatory purchase to the Holders of such Series 2008 Bonds no less than 3 days prior to
the Mandatory Purchase Date. The notice shall state the Mandatory Purchase Date, the Purchase Price and that
interest on such Series 2008 Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure
to give such notice with respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of
any other Series 2008 Bond with respect to which notice was so given. Any notice properly sent will be
conclusively presumed to have been given, whether or not actually received by any Holder.
(C) For payment of the Purchase Price on the Mandatory Purchase Date, the Series 2008 Bonds must
be delivered at or prior to 12:00 noon. on the Mandatory Purchase Date. If delivered after that time, the Purchase
Price shall be paid on the next succeeding Business Day. The Purchase Price shall be payable only upon surrender
of such Series 2008 Bonds to the Tender Agent at its principal office for delivery of Series 2008 Bonds,
accompanied by an instrument of transfer, in form satisfactory to the Tender Agent, executed in blank by the
Holder or its duly authorized attorney, with such signature guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
Section 309. Remarketing of Series 2008 Bonds; Notices.
(A) Remarketing of Series 2008 Bonds. The Remarketing Agent shall use its best efforts to offer for
sale and sell at par:
(1) all Series 2008 Bonds or portions thereof as to which notice of tender has been given
pursuant to Section 304;
(2) all Series 2008 Bonds required to be purchased pursuant to Sections 304, 305, 306 and
307 (other than upon a change to the Auction Mode); and
(3) all Bank Bonds.
37
(B) Notice of Remarketing; Registration Instructions; New Bonds. On each Purchase Date or
Mandatory Purchase Date, as the case maybe:
(1) unless the Remarketing Agent has notified the Tender Agent and the Trustee otherwise,
the Remarketing Agent shall give Immediate Notice to the Tender Agent and the Trustee not later than
12:00 noon, New York City time of the amount of tendered Series 2008 Bonds which were successfully
remarketed, the names of the tendering Holders and the registration instructions (i.e., the names, addresses
and taxpayer identification numbers of the purchasers and the denominations thereof which shall be
Authorized Denominations) with respect thereto; and
(2) the Trustee shall execute new Series 2008 Bonds for the respective purchasers thereof
which shall be available for pick-up by the Remarketing Agent pursuant to Section 310(E).
The provisions of this clause (B) shall be subject in all respects to the procedures prescribed by any Securities
Depository.
(C) Transfer of Funds; Draw on Liquidity Facility or Credit Facility. On each Purchase Date or
Mandatory Purchase Date, as the case may be:
(1) the Remarketing Agent shall give notice to the Tender Agent of receipt of the Purchase
Price of remarketed Series 2008 Bonds by 11:00 a.m. New York City time;
(2) the Remarketing Agent shall cause to be paid to the Tender Agent the Purchase Price of
the remarketed Series 2008 Bonds by 11:15 a.m. New York City time;
(3) if (i) a Liquidity Facility is then in effect with respect to the Series 2008 Bonds subject to
purchase, the Tender Agent shall give notice to the Trustee, the County, the Corporation and the Liquidity
Facility Provider and (ii) a Credit Facility is then in effect with respect to the Series 2008 Bonds subject to
purchase, the Trustee shall give notice to the County, the Corporation and the Credit Facility Provider, in
each case in accordance with the terms of the Liquidity Facility or the Credit Facility, by 11:30 a.m. New
York City time (and promptly thereafter, the Tender Agent or the Trustee, as the case may be, shall so
notify the Securities Depository) of the amount equal to the Purchase Price of all Series 2008 Bonds
tendered or deemed tendered less the aggregate amount of remarketing proceeds on hand; and
(4) if a Liquidity Facility or a Credit Facility is then in effect with respect to the Series 2008
Bonds subject to purchase, the Tender Agent or the Trustee, as the case may be, shall request funds under
the Liquidity Facility or the Credit Facility (the then existing Liquidity Facility or Credit Facility in the case
of a Substitute Liquidity Facility Date or Substitute Credit Facility Date} in accordance with the terms
thereof so as to receive thereunder by 2:30 p.m. New York City time on such date an amount, in
immediately available funds, sufficient, together with the proceeds of the remarketing of Series 2008 Bonds
on such date, to enable the Tender Agent or the Trustee, as the case may be, to pay the Purchase Price in
connection therewith. If such funds are drawn by the Trustee, the Trustee shall deliver the funds to the
Tender Agent to deposit pursuant to Section 310.
Section 310. General Provisions Relating to Tenders.
(A) Purchase Fund. The Tender Agent shall establish and maintain a special fund designated as the
"Purchase Fund," and within such fund four separate accounts designated, respectively, as the "Credit or Liquidity
Facility Deposit Account," the "Remarketing Proceeds Account" and the "Other Moneys Account." The money in
the Purchase Fund shall be held in trust and applied solely as provided in this Section.
The Tender Agent shall deposit all moneys delivered to it pursuant to Section 309(C)(2) hereof for the
purchase of Series 2008 Bonds into the Remarketing Proceeds Account and shall hold all such moneys in trust for
the exclusive benefit of the Person that shall have so delivered such moneys until the Series 2008 Bonds purchased
38
with such moneys shall have been delivered to it for the account of such Person and, thereafter, for the benefit of the
Holders tendering such Series 2008 Bonds.
The Tender Agent shall deposit all moneys delivered to it pursuant to Section 309(C)(4) hereof from a
payment by or on behalf of the Liquidity Facility Provider or Credit Facility Provider for the purchase of Series
2008 Bonds into the Credit or Liquidity Facility Deposit Account and shall hold all such moneys in trust for the
exclusive benefit of the Liquidity Facility Provider or the Credit Facility Provider until the Series 2008 Bonds
purchased with such moneys shall have been delivered to or for the account of the Liquidity Facility Provider or the
Credit Facility Provider and, after such delivery, the Tender Agent shall hold such funds exclusively for the benefit
of the Holders tendering such Series 2008 Bonds.
The Tender Agent shall deposit all moneys received from the County or the Corporation for the purchase of
Series 2008 Bonds into the Other Moneys Account and shall hold all such moneys in trust for the exclusive benefit
of the County until the Series 2008 Bonds purchased with such moneys shall have been delivered to or for the
account of the County and the Corporation or otherwise cancelled as directed by the Corporation.
Moneys in the Purchase Fund shall not be commingled with other funds held by the Tender Agent and shall
remain uninvested. Neither the County nor the Corporation shall have any right, title or interest in or to any moneys
held in the Purchase Fund.
(B) Payment of Purchase Price. At or before 3:00 p.m. New York City time on the Purchase Date or
Mandatory Purchase Date and upon receipt by the Tender Agent of the aggregate Purchase Price of the tendered
Series 2008 Bonds, the Tender Agent shall pay the Purchase Price of such Series 2008 Bonds to the Holders by
bank wire transfer in immediately available funds. The Tender Agent shall pay the Purchase Price from the
following accounts and in the following order of priority: (1) the Remarketing Proceeds Account to the extent
funds are available therein, (2) in the case of Eligible Bonds (other than Auction Bonds and Fixed Rate Bonds), the
Credit or Liquidity Facility Deposit Account, (3) any moneys in the Other Moneys Account. The Tender Agent
may assume that a Series 2008 Bond is an Eligible Bond unless it has actual knowledge to the contrary. If at close
of business New York City time on any Purchase Date or Mandatory Purchase Date any balance remains in the
Credit or Liquidity Facility Deposit Account in excess of any unsatisfied purchase obligation, such excess shall be
promptly returned to the Liquidity Facility Provider or Credit Facility Provider, respectively.
(C) Inadequate Funds for Tenders. Except as provided in the next succeeding paragraph, the County
may, but shall not be required to, pay the Purchase Price of any Series 2008 Bonds tendered for purchase on any
Purchase Date or Mandatory Purchase Date if moneys for such purchase are not otherwise available from the
sources specified in Section 310(B)(1) or (2). Failure by the County to pay the Purchase Price of any Series 2008
Bonds tendered for purchase on any Purchase Date or Mandatory Purchase Date when due, if moneys for such
purchase are not otherwise available from the sources specified in Section 310(B)(1) or (2), shall not constitute an
Event of Default under the Bond Order or this Series Resolution until 90 days after the Failed Purchase Date
(defined below) as provided in Section 701(B).
If the funds available for purchases of Eligible Bonds pursuant to this Article III are inadequate for the
purchase of all Series 2008 Bonds tendered on any Purchase Date or Mandatory Purchase Date, either as a result of
an Immediate Termination Date or a Liquidity Facility Event of Default or Credit Facility Event of Default (each, a
"Failed Purchase Date"), no purchase shall be consummated and the Tender Agent shall (1) return all tendered
Series 2008 Bonds to the Holders thereof, (2) return all moneys deposited with the Tender Agent for such purchase
to the Persons providing such moneys and (3) immediately notify the Trustee of such occurrence and cause the
Trustee to notify all Owners of the Series 2008 Bonds affected thereby of such occurrence and the reasons therefor
within three Business Days following such occurrence. Upon such occurrence, the County, at the direction of the
Corporation, shall pursue such curative action with reasonable diligence as shall be necessary to effect the
purchase or cause the purchase of all of the Series 2008 Bonds, either by providing for the delivery of a Substitute
Liquidity Facility in accordance with Section 219 or Substitute Credit Facility in accordance with Section 221 or
by converting to the Auction Mode or the Fixed Rate Mode in accordance with Section 210. All Series 2008
Bonds (other than Bank Bonds) shall bear interest at the Maximum Rate from the Failed Purchase Date to the date
that the County purchases or causes the purchase of all Series 2008 Bonds; provided, however, that
notwithstanding the foregoing, the County shall be obligated to pay the Purchase Price for the 2008 Bonds on the
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90~' day after failure to pay the Purchase Price of such Series 2008 Bonds tendered or deemed tendered for
purchase unless the Corporation or the County have (A) caused the Series 2008 Bonds to be converted to the
Auction Mode or the Fixed Rate Mode or (B) delivered to the Tender Agent a Liquidity Facility or a Substitute
Liquidity Facility or delivered to the Trustee a Credit Facility or a Substitute Credit Facility and thereby have
caused all Series 2008 Bonds to be purchased pursuant to this Section 310. In the event that the County purchases
or causes the purchase of the Series 2008 Bonds as provided above, the Series 2008 Bonds shall thereafter bear
interest at a Daily Rate, a Weekly Rate, an Auction Period Rate, a Term Rate or a Fixed Rate, as determined by the
County, at the direction of the Corporation. In any event, any right to optionally tender Eligible Bonds shall
remain suspended until a Substitute Liquidity Facility or Substitute Credit Facility has been delivered to the Tender
Agent or until such Series 2008 Bonds have been converted to the Auction Mode or the Fixed Rate Mode.
(D) Delivery of Series 2008 Bonds by Tendering Bondholders; Undelivered Bonds Deemed
Purchased. All Series 2008 Bonds to be purchased on any date shall be required to be delivered to the principal
office of the Tender Agent at or before 12:00 Noon New York City time on such Purchase Date or Mandatory
Purchase Date. If the Holder of any Series 2008 Bond (or portion thereof) that is subject to purchase pursuant to
this Article III fails to deliver such Series 2008 Bond to the Tender Agent for purchase on the Purchase Date or
Mandatory Purchase Date, and if the Tender Agent is in receipt of the Purchase Price therefor, such Series 2008
Bond (or portion thereof) shall nevertheless be deemed tendered and purchased on the day fixed for purchase
thereof and ownership of such Series 2008 Bond (or portion thereof) shall be transferred to the purchaser thereof as
provided in subsection (E) below. Any Holder who fails to deliver such Series 2008 Bond for purchase shall have
no further rights thereunder except the right to receive the Purchase Price thereof upon presentation and surrender
of said Series 2008 Bond to the Tender Agent; provided, however, that any moneys which shall be so held by the
Tender Agent and then remain unclaimed by the Holder for a period of five (5) years after the date on which such
Series 2008 Bond has become payable will be treated as abandoned property pursuant to the provisions of Section
116B-53 of the General Statutes of North Carolina, and the Tender Agent shall report and remit such moneys to
the Escheat Fund in accordance with Article 1 of Chapter 116B of the General Statutes of North Carolina, and
thereafter the Holder shall only look to the Escheat Fund for payment and then only to the extent of the amounts so
received, without any interest thereon, and the Tender Agent, the Trustee, the Paying Agent, the Registrar, the
Corporation and the County shall have no responsibility with respect to such moneys.
(E) Delivery of Series 2008 Bonds to Purchasers. As long as the Series 2008 Bonds are held under
the book-entry-only system of Securities Depository, all tenders and deliveries of Series 2008 Bonds will be
accomplished under the procedures of the Securities Depository. Otherwise, on the Purchase Date or Mandatory
Purchase Date, the Tender Agent shall direct the Trustee to execute and deliver all Series 2008 Bonds purchased
on any Purchase Date or Mandatory Purchase Date as follows: (1) Series 2008 Bonds purchased and remarketed
by the Remarketing Agent shall be registered and made available to the Remarketing Agent by 2:30 p.m. New
York City time in accordance with the instructions of the Remarketing Agent; (2) Series 2008 Bonds purchased
with amounts paid by or on behalf of the Liquidity Facility Provider or the Credit Facility Provider shall be
registered and made available in the name of or as directed in writing by the Liquidity Facility Provider or the
Credit Facility Provider on or before 2:30 p.m. New York City time and become Bank Bonds; and (3) Series 2008
Bonds purchased with amounts paid by or on behalf of the Corporation shall be registered and made available in
the name of or as directed in writing by the Corporation on or before 2:30 p.m. New York City time.
Notwithstanding the foregoing, the Tender Agent shall not deliver any such Series 2008 Bonds unless it has
received written notice from the Liquidity Provider or the Credit Facility Provider that the amount available for the
purchase of Series 2008 Bonds (prior to a conversion of all Series 2008 Bonds to Auction Period Rate or Fixed
Rate) is at least equal to the aggregate amount of all Series 2008 Bonds.
(F) No Purchases or Sales in Certain Circumstances. Anything in this Series Resolution to the
contrary notwithstanding, if (i) there shall have occurred and be continuing an Event of Default as described in
Section 701(a) or (b) of the Bond Order, or (ii) any conditions set forth in the Remarketing Agreement to the
performance of the Remarketing Agent's obligation thereunder to remarket tendered Series 2008 Bonds shall not
have been satisfied, then the Remarketing Agent shall not remarket any Series 2008 Bonds.
(G) No Remarketing to the County or the Corporation. The Remarketing Agent shall not remarket
any Series 2008 Bonds to the County or the Corporation or any Affiliate thereof or to any guarantor of the
obligations of the County or the Corporation with respect to the Series 2008 Bonds.
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Section 311. The Remarketing Agents. (A) During any Mode other than the Auction Mode and the
Fixed Rate Mode, a Remarketing Agent shall be appointed by the Corporation for each Series of the Series 2008
Bonds, subject to the conditions contained herein, and shall serve as such under the terms and provisions hereof.
The Remarketing Agent and each successor Remarketing Agent, if any, including the initial Remarketing Agent,
appointed in accordance with this Series Resolution shall designate its principal office and signify its acceptance of
the duties and obligations imposed upon it as described herein by a written instrument of acceptance delivered to the
County, the Trustee, the Tender Agent, and the Corporation, under which the Remarketing Agent (subject to
subsection (B) below) will agree particularly:
(1) to hold all moneys delivered to it hereunder for the purchase of Series 2008 Bonds for the
exclusive benefit of the Person or Persons that shall have so delivered such moneys until the Series 2008
Bonds purchased with such moneys shall have been delivered to or for the account of such Person or
Persons;
(2) to keep such books and records as shall be consistent with prudent industry practice and
to make such books and records available for inspection by the Corporation, the County, the Trustee, the
Tender Agent, the Liquidity Facility Provider (if any) and the Credit Facility Provider (if any) at all
reasonable times;
(3) to determine the Daily Rate, the Weekly Rate, the Term Rate and the Fixed Rate and give
notice of such rates in accordance with Article II hereof;
(4) to use its best efforts to find purchasers for the Series 2008 Bonds tendered for purchase,
any such sale to be made at the Purchase Price in accordance with the terms of this Series Resolution;
(5) except as herein otherwise provided, not to remarket Series 2008 Bonds to the
Corporation or the County; and
(6) to deliver to the Tender Agent all Series 2008 Bonds held by it in accordance with the
terms of this Series Resolution and the Remarketing Agreement.
(B) One or more firms may serve as co-Remarketing Agent hereunder provided that each co-
Remarketing Agent satisfies the requirements of this Section 311. If co-Remarketing Agents have been appointed
and are performing the duties of Remarketing Agent hereunder, all references herein to the Remarketing Agent
shall be deemed to refer to all the Remarketing Agents acting jointly; provided that the Remarketing Agreement
may provide that one firm may perform certain specified duties hereunder in its sole capacity.
(C) The Remarketing Agents may in good faith hold the Series 2008 Bonds or any other form of
indebtedness issued by the County; own, accept or negotiate any drafts, bills of exchange, acceptances or
obligations thereof; and make disbursements therefor and enter into any commercial or business arrangement
therewith; all without any liability on the part of the Remarketing Agent for any real or apparent conflict of interest
by reason of any such actions.
Section 312. Qualifications of Remarketing Agents. (A) Each Remarketing Agent shall be (1) a
member of the National Association of Securities Dealers having a capitalization of at least $75,000,000 or (2) a
commercial bank having a combined capital stock, surplus and undivided profits of at least $100,000,000 and
authorized by law to perform all the duties imposed upon it by this Series Resolution. Each Remarketing Agent may
at any time resign and be discharged of the duties and obligations described in this Series Resolution by giving at
least 30 days' notice to the Corporation, the County, the Trustee, the Tender Agent, the Liquidity Facility Provider
(if any), the Credit Facility Provider (if any) and each Rating Agency then rating the Series 2008 Bonds. Successor
Remarketing Agents may be appointed from time to time by the Corporation if not objected to by the County, the
Liquidity Facility Provider (if any) or the Credit Facility Provider (if any). The Remarketing Agent may be removed
upon 30 days' notice upon the written request of the Corporation, for cause for failure to perform its obligations
under the Remarketing Agreement, and, in each case, upon written notice to the Remarketing Agent, the County, the
Trustee, the Tender Agent, the Liquidity Facility Provider (if any) and the Credit Facility Provider (if any), so long
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as a successor Remarketing Agent shall have assumed the duties thereof by the effective date of such removal. No
removal or resignation of the Remarketing Agent shall be permitted until a successor has been appointed in
accordance with the provisions hereof. Upon resignation or removal of the Remarketing Agent, if no appointment
of a successor Remarketing Agent shall be made pursuant to the provisions of this Series Resolution within 30 days
after the giving of notice of such resignation or removal, the Remarketing Agent may apply to any court of
competent jurisdiction to appoint a successor Remarketing Agent. Such court may thereupon, after such notice, if
any, as such court may deem proper and prescribe, appoint a successor Remarketing Agent.
(B) Notwithstanding any other provision to the contrary contained herein, any corporation or
association into which the Remarketing Agent may be converted or merged, or with which it may be consolidated,
or to which it may be consolidated, or to which it may sell or transfer its marketing business and assets as a whole
or substantially as a whole, shall become successor Remarketing Agent hereunder and fully vested with all of the
rights, powers, trusts, duties and obligations of Remarketing Agent hereunder, without the execution or filing of
any instrument or any further act.
Section 313. The Tender Agent. (A) During any Mode other than the Auction Mode and the Fixed
Rate Mode, a Tender Agent shall be appointed by the Corporation and shall serve as such under the terms and
provisions hereof. The Tender Agent and each successor Tender Agent appointed in accordance with this Series
Resolution shall designate its principal corporate office and signify its acceptance of the duties and obligations
imposed upon it as described herein by a written instrument of acceptance delivered to the County, the Trustee and
the Corporation under which each Tender Agent will agree, particularly:
(1) to hold all Series 2008 Bonds delivered to it for purchase hereunder in trust for the
exclusive benefit of the respective Holders that shall have so delivered such Series 2008 Bonds until
moneys representing the Purchase Price of such Series 2008 Bonds shall have been delivered to or for the
account of or to the order of such Holders;
(2) to hold all moneys delivered to it hereunder for the purchase of Series 2008 Bonds in
trust for the exclusive benefit of the Person that shall have so delivered such moneys until the Series 2008
Bonds purchased with such moneys shall have been delivered to it for the account of such Person and,
thereafter, for the benefit of the Holders tendering such Series 2008 Bonds; and
(3) to keep such books and records as shall be consistent with prudent industry practice and
to make such books and records available for inspection by the Corporation, the County, the Trustee, the
Remarketing Agent, the Liquidity Facility Provider (if any) and the Credit Facility Provider (if any) at all
reasonable times; and
(B) The Tender Agent is authorized and directed to execute any Liquidity Facility. The Tender Agent
shall be entitled to the protections, indemnities, immunities and limitations from liability afforded the Trustee
hereunder in the performance of its duties.
Section 314. Qualifications of Tender Agent. (A) The Tender Agent and each successor Tender
Agent shall be a commercial bank or trust company duly organized under the laws of the United States of America
or any state or territory thereof, subject to regulations regarding fiduciary funds on deposit and, in either case,
having corporate trust powers and acting in its fiduciary capacity, and having a combined capital stock, surplus and
undivided profits of at least $100,000,000 and authorized by law to perform all duties imposed upon it hereunder.
The Tender Agent may at any time resign and be discharged of its duties and obligations by giving at least 60 days'
notice to the County, the Corporation, the Trustee, the Remarketing Agent, the Liquidity Facility Provider (if any),
the Credit Facility Provider (if any), all Holders of Series 2008 Bonds then Outstanding and the Corporation. Any
Tender Agent may be removed at any time by the County upon request of the Corporation and notice to the Trustee,
the Remarketing Agent, the Liquidity Facility Provider (if any), the Credit Facility Provider (if any) and each Rating
Agency then rating the Series 2008 Bonds. Any resignation or removal of the Tender Agent and appointment of a
successor Tender Agent shall become effective upon acceptance of appointment by the successor Tender Agent.
The Trustee shall provide notice of such successor Tender Agent to all Holders of the Series 2008 Bonds.
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(B) Upon the resignation or removal of a Tender Agent, such Tender Agent shall deliver any Series
2008 Bonds, the Liquidity Facility and moneys held by it in such capacity to its successor.
(C) Notwithstanding any other provision to the contrary contained herein, any corporation or
association into which the Tender Agent may be converted or merged, or with which it may be consolidated, or to
which it may be consolidated, or to which it may sell or transfer its marketing business and assets as a whole or
substantially as a whole, shall become successor Tender Agent hereunder and fully vested with all of the rights,
powers, trusts, duties and obligations of Tender Agent hereunder, without the execution or filing of any instrument
or any further act.
Section 31 S. Several Capacities. Notwithstanding any provision of this Series Resolution which may
be to the contrary, the same entity may serve hereunder as the Trustee, the Auction Agent, aBroker-Dealer, the
Tender Agent, the Liquidity Facility Provider, the Credit Facility Provider, the Paying Agent and the Remarketing
Agent, and in any other combination of such capacities, to the extent permitted by law; provided, however, that in no
event shall the same entity serve hereunder as the Trustee and the Liquidity Facility Provider or Credit Facility
Provider, except as permitted by this Section 315.
An entity may serve hereunder as the Trustee and the Liquidity Facility Provider or Credit Facility
Provider, and any such entity shall be subject to and shall at all times comply with the following provisions:
(i) such entity shall provide, promptly after June 30 of each year, a written
certification to the County (with a copy to the Local Government Commission), that the
procedures and controls the entity maintains are adequate to manage the potential conflicts of
interest related to serving in such capacities (e.g., see "Fiduciary Activities of National Banks," 12
C.F.R. § 9.100);
(ii) such entity shall provide, promptly after June 30, an annual written statement to
the Local Government Commission listing each North Carolina financing in which it is serving as
both the trustee and the credit or liquidity facility provider or credit facility provider and
identifying such capacities; and
(iii) such entity shall notify the County and the Local Government Commission,
within 60 days of receipt of notice thereof, of any litigation pending or threatened against the
entity in its capacity as Trustee, the Liquidity Facility Provider, the Credit Facility Provider or any
of those, and shall immediately notify the County and the Local Government Commission of any
failure to perform or default by the entity in its capacity as the Bank.
The Local Government Commission, in its sole discretion and at any time, may remove or require the
placement of the entity as Trustee upon not more than thirty (30) days prior written notice, which such
removaUreplacement to be effective upon the earlier of the expiration of said thirty (30) days (or shorter period) or
appointment/acceptance of a successor Trustee.
The foregoing provisions of this Section 315 are intended to implement the requirements of the current
policy of the Local Government Commission concerning an entity serving in the dual roles of Trustee and credit or
liquidity facility provider, and such provisions shall be automatically amended without further action of the County
to incorporate any future amendments to such policy hereafter adopted by the Local Government Commission.
ARTICLE IV.
APPLICATION OF SERIES 2008 BOND PROCEEDS
Section 401. Deposit of Funds. (A) The net proceeds from the sale of the Series 2008A Bonds shall
be applied as follows:
(i) For deposit to the credit of the Issuance Account, an amount to pay certain
expenses incurred in connection with the issuance of the Series 2008A Bonds; and
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(ii) For deposit to the credit of the Project Account, the balance of the proceeds of
the Series 2008A Bonds received by the Trustee.
(B) The net proceeds from the sale of the Series 2008B Bonds shall be applied as follows:
(i) For deposit to the credit of the Issuance Account, an amount to pay certain
expenses incurred in connection with the issuance of the Series 2008B Bonds; and
(ii) For deposit to the credit of the Project Account, the balance of the proceeds of
the Series 2008B Bonds received by the Trustee.
ARTICLE V.
SECURITY; FUNDS AND ACCOUNTS
Section SOl. Security for the Series 2008 Bonds.
(A) In addition to the security for the Series 2008 Bonds granted by the County pursuant to Section
405 of the Bond Order, the County hereby grants to the Holders and to the Trustee, on behalf of the Holders, a
pledge of the money and securities in the funds and accounts established under this Series Resolution, and the
income from the temporary investment thereof.
(B) So long as a Credit Facility is in effect, the obligation of the County to reimburse the Credit
Facility Provider under the Credit Facility Provider Agreement and the related promissory note for amounts drawn
on the Credit Facility to make payments of principal, Purchase Price and interest on the Series 2008 Bonds shall be
treated as a "Bond" for purposes of the Bond Order and this Series Resolution, and shall be entitled to the benefit
of the security pledged for the benefit of the Holders of Bonds issued under the Bond Order and this Series
Resolution.
Section 502. Establishment of Funds and Accounts. There are hereby established with the Trustee
the following funds and accounts:
(A) The New Hanover County 2008 New Hanover Regional Medical Center Revenue Bond Fund in
which there are established two special accounts to be known as the Interest Account and the Sinking Fund
Account; and
(B) The New Hanover County 2008 New Hanover Regional Medical Center Redemption Fund.
(C) The 2008 New Hanover Regional Medical Center Revenue Project Fund in which there are
established two special accounts to be known as the Project Account and the Issuance Account.
Section 503. Interest Account. The Interest Account shall be divided into subaccounts for each Series
of the Series 2008 Bonds.
All amounts received by the Trustee from draws under a Credit Facility to pay interest on the Series 2008
Bonds shall be deposited into a segregated subaccount of the Interest Account to be applied to pay interest on the
Series 2008 Bonds when due. Each such deposit may not be commingled with other money in any such account or
subaccount until such money becomes Available Moneys. The Trustee shall hold all funds deposited into the
Interest Account exclusively for the benefit of the Holders of the Series 2008 Bonds.
If no Credit Facility is in effect, then on or prior to the Business Day preceding each Interest Payment Date,
the Trustee shall deposit in the Interest Account an amount which will be equal to the interest to become due on the
Series 2008 Bonds on such Interest Payment Date; provided, however, that no deposit pursuant to this paragraph
need be made to the extent that there is a sufficient amount already on deposit in the Interest Account for that
purpose. If sufficient funds to make the transfers described in this Section 503 are not available in the Bond Fund
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on the Business Day preceding an Interest Payment Date, the Trustee will give Immediate Notice thereof to the
County, the Corporation and the Local Government Commission, promptly confirmed in writing. At the time of
such notice, if the interest rate for all Interest Periods in the Interest Payment Period ending on such Interest
Payment Date has not yet been determined, the Trustee shall use an assumed interest rate of the Maximum Rate for
the Series 2008 Bonds bearing interest in such a Mode for the number of days during such period that such interest
rate is not yet available.
The County hereby authorizes and directs the Trustee, and the Trustee hereby agrees, to withdraw from the
Interest Account sufficient funds (to the extent available) to pay the interest on the Series 2008 Bonds as the same
becomes due and payable, only in the following order of priority:
FIRST: Amounts drawn by the Trustee under a Credit Facility.
SECOND: Available Moneys (if any) on deposit in the Bond Fund, other than amounts received by the
Trustee in respect of drawings under a Credit Facility.
THIRD: Any other amounts in such funds or accounts, including but not limited to moneys obtained from
the County or the Corporation.
If a Credit Facility is in effect and the Credit Facility Provider fails to pay a conforming draw in
immediately available funds by 1:00 p.m. on an Interest Payment Date, the Trustee shall give Immediate Notice
thereof to the County and the Corporation of the amount of the deficiency, promptly confirmed in writing. Upon
notification, the County or the Corporation shall immediately deliver to the Trustee an amount sufficient to cure the
same.
In connection with any partial redemption or defeasance prior to maturity of the Series 2008 Bonds, the
Trustee may, at the written request of the Corporation, use any amounts on deposit in the Interest Account in excess
of the amount needed to pay the interest on the Series 2008 Bonds remaining outstanding on the first Interest
Payment Date occurring on or after the date of such redemption or defeasance to pay or provide for the payment of
the principal of and interest on the Series 2008 Bonds to be redeemed or defeased or as otherwise directed by the
Corporation if the Trustee shall have received an Opinion of Bond Counsel to the effect that such transfer will not,
in and of itself, adversely affect the validity or enforceability of the Series 2008 Bonds or result in the inclusion of
interest on the Series 2008 Bonds in gross income for federal income tax purposes.
Section 504. Sinking Fund Account. The Sinking Fund Account shall be divided into subaccounts for
each Series of the Series 2008 Bonds.
All amounts received by the Trustee from draws under a Credit Facility to pay principal of the Series 2008
Bonds (whether at maturity, pursuant to mandatory sinking fund redemption or acceleration) shall be deposited into
a segregated subaccount of the Sinking Fund Account to be applied to pay such principal of the Series 2008 Bonds
when due. Each such deposit may not be commingled with other money in any such account or subaccount until
such money becomes Available Moneys. The Trustee shall hold all funds deposited into the Sinking Fund Account
exclusively for the benefit of the Holders of the Series 2008 Bonds.
If no Credit Facility is in effect, on or prior to three Business Days preceding each Maturity Date and each
mandatory Sinking Fund Account Redemption Date, the Trustee shall deposit in the Sinking Fund Account an
amount which is equal to the principal of the Series 2008 Bonds next to become due by maturity or mandatory
Sinking Fund Account redemption. No such deposit need be made, however, to the extent that there is a sufficient
amount already on deposit and available for such purpose in the Sinking Fund Account to be applied to such next
maturity or mandatory Sinking Fund Account redemption payment. If sufficient funds to make the transfers to the
Sinking Fund Account described in this Section 504 are not available on the third Business Day preceding any
Maturity Date or mandatory Sinking Fund Account Redemption Date, the Trustee will give Immediate Notice
thereof to the County and the Corporation.
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Moneys on deposit in the Sinking Fund Account, other than income earned thereon which is to be
transferred to other funds created hereunder and except as otherwise provided in the Bond Order, shall be applied by
the Trustee to pay principal on the Series 2008 Bonds as it becomes due and to redeem the Series 2008 Bonds in
accordance with the mandatory Sinking Fund Account redemption schedule provided for in Section 302 hereof or to
reimburse the Credit Facility Provider for amounts drawn on the Credit Facility to make such payments. In lieu of
such mandatory Sinking Fund Account redemption, the Trustee shall, at the written request of the Corporation,
purchase for cancellation an equal principal amount of Series 2008 Bonds of the Series and maturity to be redeemed
by the Corporation at prices specified by the Corporation not exceeding the principal amount of the Series 2008
Bonds being purchased plus accrued interest with such interest portion of the purchase price to be paid from the
Interest Account and the principal portion of such purchase price to be paid from the Sinking Fund Account. In
addition, the amount of Series 2008 Bonds to be redeemed on any date pursuant to the mandatory Sinking Fund
Account redemption schedule shall be reduced by the principal amount of Series 2008 Bonds of the Series and
maturity required to be redeemed which are acquired by the County or the Corporation and delivered to the Trustee
for cancellation.
The County hereby authorizes and directs the Trustee, and the Trustee hereby agrees, to withdraw from the
Sinking Fund sufficient funds (to the extent available) to pay the principal of the Series 2008 Bonds as the same
become due and payable, whether due by maturity or mandatory sinking fund redemption, only in the following
order of priority:
FIRST: Amounts drawn by the Trustee under a Credit Facility.
SECOND: Available Moneys (if any) on deposit in the Sinking Fund Account, other than amounts
received by the Trustee in respect of drawings under a Credit Facility.
THIRD: Any other amounts in such funds or accounts, including but not limited to moneys obtained from
the County or the Corporation.
If a Credit Facility is in effect and the Credit Facility Provider fails to pay a conforming draw in
immediately available funds by 1:00 p.m. on any Maturity Date or mandatory Sinking Fund Account Redemption
Date, the Trustee shall give Immediate Notice thereof to the County and the Corporation of the amount of the
deficiency, promptly confirmed in writing. Upon notification, the County or the Corporation shall immediately
deliver to the Trustee an amount sufficient to cure the same.
Section 505. Redemption Fund. The Redemption Fund shall be divided into subaccounts for each
Series of the Series 2008 Bonds. In the event of a deposit with the Trustee by the County of moneys from any other
source for redeeming Series 2008 Bonds or the purchase of Series 2008 Bonds for cancellation, except as otherwise
provided in this Series Resolution, such moneys shall be deposited in the Redemption Fund. Moneys on deposit in
the Redemption Fund shall be used for the redemption or purchase of Series 2008 Bonds in accordance with the
provisions of Article III hereof.
While a Credit Facility is in effect, each deposit into the Redemption Fund not constituting Available
Moneys shall be placed in a separate account or subaccount within the Redemption Fund, and may not be
commingled with other money in any such fund, account or subaccount until such money becomes Available
Moneys. The Trustee shall hold all funds deposited into the Redemption Fund exclusively for the benefit of the
Holders of the Series 2008 Bonds.
The County hereby authorizes and directs the Trustee, and the Trustee hereby agrees, to withdraw from the
Redemption Fund sufficient funds (to the extent available) to redeem the Series 2008 Bonds (other than pursuant to
mandatory sinking fund redemption), only in the following order of priority:
FIRST: Amounts drawn by the Trustee under a Credit Facility.
SECOND: Available Moneys (if any) on deposit in the Redemption Fund, other than amounts received by
the Trustee in respect of drawings under a Credit Facility.
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THIRD: Any other amounts in such funds, accounts or subaccounts, including but not limited to moneys
obtained from the County or the Corporation.
If a Credit Facility is in effect and the Credit Facility Provider fails to pay a conforming draw in
immediately available funds by 1:00 p.m. on any Redemption Date, the Trustee shall give Immediate Notice thereof
to the County and the Corporation of the amount of the deficiency, promptly confirmed in writing. Upon
notification, the County or the Corporation shall immediately deliver to the Trustee an amount sufficient to cure the
same by 2:00 p.m. on such redemption date unless the Series 2008 Bonds are subject to a conditional redemption as
provided in Section 303(A).
Section 506. Project Fund. Proceeds of the Series 2008 Bonds shall be deposited as soon as
practicable upon its receipt to the credit of the Project Account.
The money in the Project Fund shall be held by the Trustee in trust and, subject to the provisions of Section
511 of this Series Resolution, shall be applied to the payment of the Cost of the Project, and, pending such
application, shall be subject to a lien and charge in favor of the Holders of the Series 2008 Bonds and shall be held
for the security of such Holders.
SeCtioll 507. Payments from Project Fund. Payment of the Cost of the Project shall be made
from the Project Fund. All payments from the Project Fund shall be subject to the provisions and restrictions set
forth in this Section, and the County covenants that it will not cause or permit to be paid from the Project Fund any
sums except in accordance with such provisions and restrictions.
All issuance costs, within the meaning of Section 147(g) of the Code ("Issuance Costs"), incurred
in connection with the Series 2008 Bonds and to be financed from the proceeds of the sale of the Series 2008 Bonds
shall be paid only from the Issuance Account of the Project Fund. Examples of Issuance Costs include (but are not
limited to) the following, if any:
(1) counsel fees (including bond counsel, underwriters' counsel, issuer's counsel, corporation
counsel in the case of borrowings such as those herein contemplated, as well as any other
specialized counsel fees incurred in connection with the borrowing);
(2) rating agency fees;
(3) depositary fees incurred in connection with the borrowing;
(4) paying agent and certifying and authenticating agent fees related to issuance of the Series
2008 Bonds;
(5) accountant fees related to issuance of the Series 2008 Bonds;
(6) Local Government Commission fees;
(7) printing costs (for the Series 2008 Bonds and of preliminary and final offering materials);
(8) costs incurred in connection with the required public approval process (e.g., publication
costs for public notices generally and costs of the public hearing); and
(9) costs of engineering and feasibility studies necessary to the issuance of the Series 2008
Bonds (as opposed to such studies related to completion of the Project, but not to the financing).
Furthermore, other items which constitute Costs of the Project (as described in Section 508 hereof) may be
paid from the Issuance Account.
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Section 508. Cost of Project. For the purpose of this Series Resolution, the Cost of the Project shall
embrace such costs as are eligible costs within the purview of the Act and, without intending thereby to limit or
restrict any proper definition of such Cost, shall include the following:
(a) the cost of all labor, materials and services, the cost of all lands, property, rights, rights of way,
easements, franchises and other interests as may be deemed necessary or convenient for such acquisition,
construction and equipping, the cost of all machinery and equipment, fmancing charges, engineering and legal
expenses, costs of plans, specifications, surveys, other expenses necessary or incident to determining the feasibility
or practicality of such acquisition, construction and equipping, administrative expenses, and such other expenses as
may be necessary or incident to the financing, acquisition and construction of the Project and the placing of the
Project in operation.
(b) Issuance Costs;
(c) the cost of borings and other preliminary investigations to determine foundation or other
conditions, expenses necessary or incident to determining the feasibility or practicability of constructing the Project
and fees and expenses of engineers, architects, management consultants and hospital consultants for making studies,
surveys and estimates of expenses and of engineers and architects .for preparing plans and specifications and
supervising construction as well as for the performance of all other duties of engineers and architects set forth herein
in relation to the acquisition and construction of the Project;
(d) all other items of expense not elsewhere in this Section specified incident to the acquisition,
construction and equipping of the Project and the fmancing thereof, including the acquisition of lands, property
rights, rights of way, easements, franchises and interests in or relating to lands, title insurance, costs of surveys and
other expenses in connection with such acquisition, and expenses of administration, all properly chargeable to the
acquisition, construction and equipping of the Project; and
(e) obligations or expenses heretofore or hereafter incurred or paid by the County or the Corporation
for any of the foregoing purposes.
Section 509. Requisitions from Project Fund. Payments from the Project Fund shall be made in
accordance with the provisions of this Section. Before any such payment shall be made, the County and the
Corporation shall file with the Trustee:
(a) a requisition, signed by the County Representative and the Corporation Representative, in the form
attached hereto as Exhibit C, stating:
(i) the item number of each payment,
(ii) the name of the person, firm or corporation to whom each such payment is due
(unless the payment is for the Corporation's working capital),
(iii) the respective amounts to be paid,
incurred,
(iv) the purpose by general classification for which each obligation to be paid was
(v) that obligations in the stated amounts have been incurred and are currently due
and payable and that each item thereof is a proper charge against the Project Fund and has not
been paid,
(vi) that no notice of any lien, right to lien or attachment upon, or claim affecting the
right of any such persons, firms or corporations to receive payment of the respective amounts
stated in such requisition, has been filed or attached or, if any of the foregoing have been filed or
attached, that the same will be satisfied or discharged or that provisions have been made (which
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shall be specified) to adequately protect the Trustee and the Holders from incurring any loss as a
result of the same,
(vii) that such requisition contains no item representing payment on account of any
retainage to which the County or the Corporation is entitled at the date of such requisition; and
(viii) whether such requisition shall be paid from the Project Account or the Issuance
Account; and
(b) as to obligations payable from the Project Account, a certificate signed by the County
Representative and the Corporation Representative and attached to such requisition that such obligations do not
represent Issuance Costs.
Upon receipt of each requisition and accompanying certificate, the Trustee shall pay the obligations set
forth in such requisition out of money in the Project Fund, and each such obligations shall be paid by check signed
by one or more officers or employees of the Trustee designated for such purpose by the Trustee. In making such
payments, the Trustee may rely upon such requisitions. If for any reason the County and the Corporation should
decide prior to the payment of any item in a requisition not to pay such item, it shall give written notice of such
decision to the Trustee and thereupon the Trustee shall not make such payment.
Section 510. Reliance Upon Requisitions. The Trustee may rely upon all requisitions and opinions
received by it as conditions of payment from the Project Fund. Such requisitions and opinions shall be retained by
the Trustee for a period of five years and shall be subject at all reasonable times to examination by the County, the
Corporation and the Local Government Commission.
Section Sll. Completion of the Project and Disposition of Project Fund Balance. When the
acquisition and construction of the Project shall have been completed, which fact shall be evidenced to the Trustee
by a certificate signed by the County Representative and the Corporation Representative to the effect that there are
no mechanics', workers', repairmen's, architects', engineers', surveyors', carriers', laborers', contractors' or
materialmen's liens on any property constituting a part of the Project on file in any public office where the same
should be filed to be perfected and that the time within which such liens can be filed has expired, the balance in the
Project Fund shall be transferred by the Trustee to the credit of the Bond Fund (and any account herein) or the
Redemption Fund, as the County, at the Corporation's direction, shall direct.
ARTICLE VI.
DEPOSITORIES OF MONEY, SECURITY FOR DEPOSITS,
INVESTMENT OF FUNDS
Section 601. Security for Deposits. Any and all money deposited or cause to be deposited by the
County with the Trustee (or one or more other Depositaries as provided in the Bond Order), except for the amounts
in the Operating Fund to be used to pay Operating Expenses, shall be trust funds under the terms hereof and shall
not be subject to any lien or attachment by any creditor of the County or the Corporation. Such money shall be held
in trust and applied in accordance with the provisions of this Series Resolution and the Bond Order.
Until money deposited with the Trustee or any other Depositary hereunder is invested in Investment
Obligations, the amount of money in excess of the amount guaranteed by the Federal Deposit Insurance Corporation
or other federal agency shall be continuously secured, for the benefit of the County and the Holders, either (a) by
lodging with a bank or trust company chosen by the Trustee as custodian or, if then permitted by law, by setting
aside under control of the trust department of the bank holding such deposit, as collateral security, Government
Obligations or other marketable securities eligible as security for the deposit of trust funds under regulations of the
Comptroller of the Currency of the United States or applicable State law or regulations, having a market value
(exclusive of accrued interest) not less than the amount of such deposit, or (b) if the furnishing of security as
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provided in clause (a) above is not permitted by applicable law, then in such other manner as may then be required
or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference
in the case of, the deposit of trust funds; provided, however, that it shall not be necessary for the Trustee to give
security for the deposit of any money with it for the payment of the principal of or the redemption premium or the
interest on any Series 2008 Bonds, or for the Trustee or any Depositary to give security for any money that shall be
represented by obligations purchased under the provisions of this Article as an investment of such money.
All money deposited with the Trustee or any Depositary shall be credited to the particular fund or account
to which such money belongs.
Section 602. Investment of Money. Money held for the credit of all funds and accounts created under
this Series Resolution or the Bond Order shall be continuously invested and reinvested by the Trustee in Investment
Obligations to the extent practicable. Any such Investment Obligations shall mature not later than the respective
dates when the money held for the credit of such funds or accounts will be required for the purposes intended.
Notwithstanding the foregoing, no Investment Obligations in any fund or account may mature beyond the latest
maturity date of any Series 2008 Bonds Outstanding at the time such Investment Obligations are deposited. For the
purposes of this Section, the maturity date of repurchase agreements is the maturity date of such repurchase
agreements and not the maturity date of the underlying obligations.
The County or the Corporation may at any time give to the Trustee written directions respecting the
investment of any money required to be invested hereunder, subject, however, to the provisions of this Article, and
the Trustee shall then invest such money under this Section as so directed by the County or the Corporation. The
Trustee may request, in writing, direction or authorization of the County or the Corporation with respect to the
proposed investment of money under the provisions of this Series Resolution. Upon receipt of such request,
accompanied by a memorandum setting forth the details of any proposed investment, the County or the Corporation
will either approve such proposed investment or will give written directions to the Trustee respecting the investment
of such money and, in the case of such directions, the Trustee shall then, subject to the provisions of this Article,
invest such money in accordance with such directions.
Investment Obligations acquired with money and credited to any fund or account established under this
Series Resolution or the Bond Order shall be held by or under the control of the Trustee and while so held shall be
deemed at all times to be part of such fund or account in which such money was originally held, and the interest
accruing thereon and any profit or loss realized upon the disposition or maturity of such investment shall be credited
to or charged against such fund or account. The Trustee shall reduce to cash a sufficient amount of such Investment
Obligations whenever it shall be necessary so to do in order to provide moneys to make any payment or transfer of
moneys from any such fund or account. The Trustee shall not be liable or responsible for any loss resulting from
any such investment.
Whenever a payment or transfer of money between two or more of the funds or accounts established
pursuant to this Series Resolution or the Bond Order is permitted or required, such payment or transfer may be made
in whole or in part by transfer of one or more Investment Obligations at a value determined in accordance with this
Article VI, provided that the Investment Obligations transferred are those in which moneys of the receiving fund or
account could be invested at the date of such transfer.
Any money held by the Trustee or the Tender Agent that is derived from a draw under a Credit Facility or a
Liquidity Facility and any other money held for the credit of the Purchase Fund by the Tender Agent shall not be
invested.
Section 603. Valuation. For the purpose of determining the amount on deposit to the credit of any
such fund or account, Investment Obligations in which money in any fund or account is invested shall be valued (a)
at cost if such Investment Obligations mature within six months from the date of valuation thereof, and (b) if such
Investment Obligations mature more than six months after the date of valuation thereof, at the price at which such
Investment Obligations are redeemable by the holder at his option if so redeemable, or, if not so redeemable, at the
lesser of (i) the cost of such Investment Obligations minus the amortization of any premium or plus the amortization
of any discount thereon and (ii) the market value of such Investment Obligations.
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The Investment Obligations in such funds and accounts shall be valued at any time requested by the County
Representative or the Corporation Representative on reasonable notice to the Trustee (which period of notice may be
waived or reduced by the Trustee); provided, however, that the Trustee shall not be required to value the Investment
Obligations more than once in any calendar month.
ARTICLE VII.
EVENTS OF DEFAULT
Section 701. Events of Default.
(A) Events of Default under Bond Order. The events of default set forth in Section 701 of the Bond
Order shall each constitute an Event of Default under this Series Resolution, and the Trustee shall have all rights
and remedies hereunder as set forth in the Bond Order. In addition, the following shall constitute an Event of
Default under this Series Resolution:
Credit Facility Events of Default. (i) The Trustee shall have received written notice from the Credit
Facility Provider that an "event of default" has occurred under the Credit Facility Provider Agreement and a written
direction from the Credit Facility Provider that the Series 2008 Bonds be accelerated, (ii) the Trustee shall have
received written notice from the Credit Facility Provider that the amount of an interest drawing under the Credit
Facility will not be reinstated as provided in the Credit Facility or (iii) payment of the Purchase Price of Series 2008
Bonds tendered or deemed tendered for purchase shall not have been made within ninety (90) days after failure to
pay the Purchase Price of Series 2008 Bonds tendered or deemed tendered for purchase.
(B) Acceleration. If the Trustee shall have received the written notice and written direction from the
Credit Facility Provider as provided for in subsection (A)(i) of this Section, the Trustee shall declare the principal
amount of Series 2008 Bonds Outstanding to be due and payable immediately; and upon such declaration the same
shall become and be immediately due and payable. If a Credit Facility is in effect, upon any declaration of
acceleration under the Bond Order or this Series Resolution, the Trustee shall immediately draw under such Credit
Facility as provided in Section 220. If the Credit Facility Provider honors the drawing under the Credit Facility
upon a declaration of the Series 2008 Bonds, interest on the Series 2008 Bonds shall accrue only to the date of
such declaration, and the Trustee shall pay the principal of and interest on the Series 2008 Bonds to the Holders
immediately following the receipt of funds from such drawing. Immediately following any declaration of
acceleration, the Trustee shall cause to be mailed notice of such declaration by first class mail, postage prepaid, to
each Holder of a Series 2008 Bond at his last address appearing on the register. Any defect in or failure to give
such notice of declaration shall not effect the validity of such declaration. The Trustee shall not waive any Event
of Default or any event of default under the Credit Facility Provider Agreement as described in subsection (A)(i) of
this Section (i) if the Credit Facility Provider has provided written notice to the Trustee that such an Event of
Default or event of default under the Credit Facility Provider Agreement has occurred, until the Trustee shall have
received written notice from the Credit Facility Provider rescinding such notice and (ii) if a drawing has been made
under the Credit Facility, until the Trustee shall have received written confirmation from the Credit Facility
Provider that the amount of such drawing has been reinstated.
ARTICLE VIII.
THE TRUSTEE
Section 801. Acceptance of Duties by Trustee. The Trustee shall signify its acceptance of the duties
and obligations and the trusts imposed upon it by this Series Resolution and the Bond Order by execution of the
certificate of authentication on the Series 2008 Bonds.
Section 802. Indemnification of Trustee. The Trustee shall not require indemnity as a precondition to
making any payments to Holders of the Series 2008 Bonds, making any drawing under the Credit Facility, or
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effecting any mandatory redemption, tender or acceleration of the Series 2008 Bonds pursuant to this Series
Resolution.
Section 803. Compensation of Trustee. The Trustee shall not make any payment to compensate itself
for any services performed under the Bond Order or this Series Resolution or for any expenses, charges or other
disbursements incurred in and about the administration and the performance of its powers and duties under the Bond
Order or this Series Resolution from any remarketing proceeds or amounts received by the Trustee in respect of any
drawings under a Credit Facility.
Section 804. Eligibility of Trustee. The Trustee and each successor Trustee shall be a commercial
bank or trust company duly organized under the laws of the United States of America or any state or territory
thereof, subject to regulations regarding fiduciary funds on deposit, which, in either case, has corporate trust powers
and is acting in its fiduciary capacity.
ARTICLE IX.
SUPPLEMENTAL SERIES RESOLUTIONS
Section 901. Procedure for Adoption of Supplemental Series Resolutions. The County may, from
time to time and at any time, adopt such resolutions amending and supplementing the provisions of this Series
Resolution in the same manner as is provided in Sections 1001 and 1002 of the Bond Order for the adoption of
supplemental bond orders and the provisions of said Sections 1001 and 1002 are hereby incorporated herein and
made applicable hereto in the same manner as if herein set forth. Any amendment to the definitions of Maximum
Rate, Liquidity Facility, Credit Facility, Mandatory Purchase Date, and the provisions set forth in Articles II and III,
shall require the prior approval of the Local Government Commission.
Section 902. Exclusion of Series 2008 Bonds. Series 2008 Bonds owned or held by or for the account
of the County or the Corporation or any Affiliate shall not be deemed Outstanding Bonds for the purpose of any
consent or other action or any calculation of Outstanding Bonds provided for in this Article, or Articles VII, VIII, X
or XI of the Bond Order, and neither of such parties as Holders of such Series 2008 Bonds shall be entitled to
consent or take any other action provided for in this Article, or Articles VII, VIII, X or XI of the Bond Order. At the
time of any consent or other action taken under this Article, or Articles VII, VIII, X or XI of the Bond Order, the
County or the Corporation shall furnish the Trustee a certificate signed by a County Representative or a Corporation
Representative, upon which the Trustee may rely, describing all Series 2008 Bonds so to be excluded.
ARTICLE X.
DEFEASANCE
Section 1001. Cessation of Interest of Holders and Repeal of Series Resolution. If, when (a) the
Series 2008 Bonds shall have become due and payable in accordance with their terms or shall have been duly called
for redemption, or (b) irrevocable instructions to pay such Series 2008 Bonds at their respective maturities or to call
such Series 2008 Bonds for redemption, shall have been given by the County to the Trustee, the whole amount of
the principal and the interest and premium, if any, so due and payable upon all Series 2008 Bonds shall be paid or if
the Trustee shall hold sufficient money or noncallable Defeasance Obligations the principal of and the interest on
which, when due and payable, will provide sufficient money to pay the principal of, and the interest and redemption
premium, if any, on all Series 2008 Bonds then Outstanding to the maturity date or dates of such Series 2008 Bonds
or to the date or dates specified for the redemption thereof, (c) sufficient funds shall also have been provided or
provision made for paying all other obligations payable hereunder by the County, in connection with a refunding as
shown by a verification report of an Accountant as to the adequacy of the escrow (it being understood that if the
Series 2008 Bonds are in the Daily Mode or Weekly Mode, then interest shall be calculated at the Maximum Rate),
which is delivered to the Trustee, and (d) an Opinion of Counsel is delivered to the Trustee stating to the effect that
the Series 2008 Bonds are deemed paid and no longer Outstanding, then and in that case the right, title and interest
of the Trustee hereunder and the obligations of the County hereunder shall thereupon cease, and the County shall
repeal this Series Resolution and the Trustee, on demand of the County, shall distribute any surplus in any and all
52
balances remaining in all funds and accounts, other than money held for the redemption or payment of Series 2008
Bonds. Otherwise, this Series Resolution shall be, continue and remain in full force and effect; provided that, in the
event Defeasance Obligations shall be deposited with and held by the Trustee as hereinabove provided, (i) in
addition to the requirements set forth in Article III of this Series Resolution, the Trustee, within thirty (30) days after
such Defeasance Obligations shall have been deposited with it, shall cause a notice signed by the Trustee to be
mailed, postage prepaid, to all Holders setting forth (a) the date or dates, if any, designated for the redemption of the
Series 2008 Bonds, (b) a description of the Defeasance Obligations so held by it, and (c) that this Series Resolution
has been repealed in accordance with the provisions of this Section, but failure to mail any such notice to any Holder
shall not affect the validity of the defeasance of the Series 2008 Bonds pursuant to this Section and (ii) (a) the
Trustee shall nevertheless retain such rights, powers and privileges under this Series Resolution and the Bond Order
as may be necessary and convenient in respect of the Series 2008 Bonds for the payment of the principal, interest
and any premium for which such Defeasance Obligations have been deposited and (b) the Trustee shall retain such
rights, powers and privileges under this Series Resolution and the Bond Order as may be necessary and convenient
for the registration, transfer and exchange of Series 2008 Bonds.
All money and Defeasance Obligations held by the Trustee pursuant to this Section shall be held in trust
and applied to the payment, when due, of the obligations payable therewith. While the Series 2008 Bonds are in the
Daily Mode or Weekly Mode, any deposits made and any Defeasance Obligations purchased pursuant to this
Section shall be so made or purchased using Available Moneys.
Notwithstanding any other provision of this Series Resolution to the contrary, if Outstanding Series 2008
Bonds have been deemed to be paid because a deposit of Available Moneys has been made under this Section with
proceeds of one or more drawings under the Credit Facility, then the surrender by the Trustee of the Credit Facility
to the Credit Facility Provider for cancellation prior to the maturity or redemption date of the Series 2008 Bonds
shall not cause the Series 2008 Bonds to be subject to purchase under Section 307.
Notwithstanding any provision of this Series Resolution to the contrary, Series 2008 Bonds paid by
payments made under a Credit Facility shall be deemed to be Outstanding Series 2008 Bonds until all amounts due
under the Credit Facility Provider Agreement have been paid to the Credit Facility Provider.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 1101. Manner of Giving Notice. All notices, demands and requests to be given to or made
hereunder by the County and the Trustee shall be given or made in writing and shall be deemed to be properly given
or made if sent by United States registered mail, return receipt requested, postage prepaid, addressed as follows:
(A) As to the County --
County of New Hanover
230 Governmental Center Drive, Suite 165
Wilmington, North Carolina 28403
Attention: Finance Director
(B) As to the Corporation --
New Hanover Regional Medical Center
2131 S. 17th Street
Wilmington, North Carolina 28401
Attention: Chief Financial Officer
(C) As to the Trustee and the Tender Agent--
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First-Citizens Bank & Trust Company
4300 Six Forks Road
Mailcode FCC61
Raleigh, North Carolina 27609
Attention: Institutional Advisory Services
(D) As to the Local Government Commission --
Local Government Commission of North Carolina
4505 Meadows Lane
Raleigh, North Carolina 27603-1388
Attention: Secretary
(E) As to the Credit Facility Provider--
RBC Bank (USA)
200 Providence Road, 3`d Floor
Charlotte, North Carolina 28207
Telephone: (704) 686-1194
Fax: (704) 686-1498
Attention: Glenda Parker
With a copy to--
RBC Bank (USA)
301 Fayetteville Street, Suite 1100
Raleigh, North Carolina 27601
Telephone: (919) 788-5430
Fax: (919) 788-5515
Attention: James M. Hansen
(F) As to the Remarketing Agent for the Series 2008A Bonds--
RBC Capital Markets Corporation
Three World Financial Center
200 Vesey Street, 12`~ Floor
New York, New York 10281
Attention: Short-term Desk
(G) As to the Remarketing Agent for the Series 2008B Bonds--
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Four World Financial Center, 7th Floor
New York, New York 10080
Attention: Short-term Desk
(H) As to Moody's--
Moody's Investors Service, Inc.
7 World Trade Center
250 Greenwich Street, 23`d Floor,
New York, New York 10007,
Attention: Municipal Structured Products Group
Email: MSPGSurveillance@moodys.com
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(I) As to Standard & Poor's--
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10009
Attention: Public Finance/LOC
Email: pubfm_structured@standardandpoors.com
Any such notice, demand or request may also be transmitted to the appropriate above-mentioned party by
telegram, telecopy or telephone and shall be deemed to be properly given or made at the time of such transmission
if, and only if, such transmission of notice shall be confirmed in writing and sent as specified above.
Any of such addresses may be changed at any time upon written notice of such change sent by United
States registered mail, postage prepaid, to the other parties by the party effecting the change.
Section 1102. Trustee, County, Corporation, Credit Facility Provider and Holders Alone Have
Rights Under Series Resolution. Except as herein otherwise expressly provided, nothing in this Series Resolution,
express or implied, is intended or shall be construed to confer upon any person, firm or corporation, other than the
Trustee, the County, the Corporation, the Credit Facility Provider (if any) and the Holders, any right, remedy or
claim, legal or equitable, under or by reason of this Series Resolution or any provision hereof, this Series Resolution
and all its provisions being intended to be and being for the sole and exclusive benefit of the Trustee, the County, the
Corporation, the Credit Facility Provider (if any) and the Holders.
Section 1103. Effect of Partial Invalidity. In case any one or more of the provisions of this Series
Resolution or the Series 2008 Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity
shall not affect any other provisions of this Series Resolution or the Series 2008 Bonds, but this Series Resolution
and the Series 2008 Bonds shall be construed and enforced as if such illegal or invalid provisions had not been
contained therein. In case any covenant, stipulation, obligation or agreement contained in the Series 2008 Bonds or
this Series Resolution shall for any reason be held to be in violation of any law, then such covenant, stipulation,
obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the County to
the full extent permitted by law.
Section 1104. Effect of Covenants. All covenants, stipulations, obligations and agreements of the
County contained in this Series Resolution shall be deemed to be covenants, stipulations, obligations and agreements
of the County to the full extent permitted by the Constitution and laws of the State. This Series Resolution is
adopted with the intent that the laws of the State shall govern its construction.
Section 1105. Dealing in Series 2008 Bonds. The Trustee and any bank or trust company acting as
Depositary under this Series Resolution and its directors, officers, employees or agents, and any officer, employee or
agent of the Trustee, may in good faith, buy, sell, own, hold and deal in any Series 2008 Bonds issued under the
provisions of this Series Resolution and may join in any action which any Holder may be entitled to take with like
effects as if such Trustee were not a trustee and such bank or trust company were not a Depositary under this Series
Resolution.
Section 1106. Approval of Bond Purchase Agreements, Remarketing Agreements, Credit Facility,
Credit Facility Provider Agreement and Fifth Amendment to Lease Agreement. The form, terms and provisions of
the Purchase Agreements, relating to the Series 2008 Bonds, the Remarketing Agreements, the Credit Facility and
the Fifth Amendment to Lease Agreement, are hereby approved, and the Chairman or Vice Chairman of the Board
of the County and the County Manager are hereby authorized and directed to execute and deliver the Purchase
Agreements and the Fifth Amendment to Lease Agreement in the forms presented at this meeting together with such
changes, modifications and additions as he, with the advice of counsel, may deem necessary and appropriate; such
execution shall be conclusive evidence of the authorization and approval thereof by the County.
Section 1107. Approval of Official Statement. The Chairman or Vice Chairman of the Board of the
County and the County Manager are hereby authorized and directed to execute and deliver the Official Statement, to
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be dated as of the date of distribution thereof, relating to the Series 2008 Bonds, in the form presented at this
meeting together with such changes, modifications, and additions as he, with the advice of counsel, may deem
necessary and appropriate; such execution and delivery shall be conclusive evidence of the approval and
authorization in all respects by the County of the form and content thereof. The County hereby ratifies the
distribution of such Official Statement and approves and consents to the use and distribution of copies of such
Official Statement, the Bond Order and this Series Resolution by the underwriters in connection with the public
offering of the Series 2008 Bonds.
Section 1108. Appointment of County Representative and Authorization for Other Acts. (A) The
Chairman and the Vice Chairman of the Board of the County, the County Manager, the Finance Director and the
County Attorney are hereby appointed County Representatives with full power to carry out the duties set forth in the
Bond Order and this Series Resolution.
(B) The members of the Board of the County and the agents and employees of the County and the
officers and agents of the Trustee are hereby authorized and directed to do all acts and things required of them by
the provisions of the Series 2008 Bonds, the Fifth Amendment to Lease Agreement, the Bond Order, the Purchase
Agreement, the Remarketing Agreements, the Credit Facility Provider Agreement and the Credit Facility for the
full, punctual and complete performance of the terms, covenants, provisions and agreements of the same and also
to do all acts and things required of them by the provisions of this Series Resolution.
(C) The Chairman, the Vice Chairman and the Clerk to the Board of the County, and the County
Manager, the Finance Director and the County Attorney, or any of them, are further authorized and directed
(without limitation except as may be expressly set forth herein) to take such action and to execute and deliver any
such documents, deeds, certificates, undertakings, agreements or other instruments as they, with the advice of
counsel, may deem necessary or appropriate to effect the transactions contemplated by the Series 2008 Bonds, the
Fifth Amendment to Lease Agreement, the Bond Order, this Series Resolution, the Purchase Agreement, the
Remarketing Agreements, the Credit Facility Provider Agreement and the Credit Facility.
Section 1109. No Recourse Against Commissioners, Directors, Officers or Employees of County,
Corporation or Local Government Commission. No recourse, under or upon any statement, obligation, covenant or
agreement contained in this Series Resolution, in any Series 2008 Bond hereby secured or in any document or
certification whatsoever, or under any judgment obtained against the County, the Corporation or the Local
Government Commission, or by the enforcement of any assessment, or by any legal or equitable proceeding by
virtue of any constitution or statute or otherwise, or under any circumstances, shall be had against any
commissioner, director, officer or employee, as such, of the County, the Corporation or the Local Government
Commission, either directly or through the County, the Corporation, the Local Government Commission, or
otherwise, for the payment, for or to the County or the Corporation, or any receiver of the County or the
Corporation, or for or to any Holder, or otherwise, of any sum that may be due and unpaid upon any such Series
2008 Bond. Any and all personal liability of every nature, whether at common law or in equity or by statute or by
constitution or otherwise, of any such commissioner, director, officer or employee, as such, to respond, by reason of
any act or omission on his or her part or otherwise, for the payment, for or to the County, the Corporation, the Local
Government Commission, or any receiver of the County, the Corporation or the Local Government Commission, or
for or to any Holder, or otherwise, of any sum that may remain due and unpaid upon the Series 2008 Bonds hereby
secured or any of them, is hereby expressly waived and released as an express condition of, and in consideration for,
the adoption of this Series Resolution and the issuance of the Series 2008 Bonds.
Section 1110. Headings. Any heading preceding the text of the several articles hereof, and any table
of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not
constitute a part of this Series Resolution, nor shall they affect its meaning, construction or effect.
Section 1111. Continuing Disclosure. The County covenants and agrees that in the event of the
termination of the Lease it shall impose upon any successor lessee of the Existing Facilities or the Health Care
System the same obligations, or if the County shall operate the Existing Facilities or the Health Care System, the
County shall assume and perform the same obligations, imposed upon the Corporation under the Lease.
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If the County fails to comply with the undertaking described above, the Trustee or any beneficial owner of
the Series 2008 Bonds then Outstanding may take action to protect and enforce the rights of beneficial owners with
respect to such undertaking, including an action for specific performance; provided, however, that failure to comply
with such undertaking shall not be an Event of Default and shall not result in any acceleration of payment of the
Series 2008 Bonds. Notwithstanding any provision in this Series Resolution to the contrary, no conversion of the
Series 2008 Bonds to a Term Rate Mode or the Fixed Rate Mode shall be permitted unless the County shall have
adopted such resolutions or entered into such contractual obligations as are necessary to comply with the provisions
of Rule 15c2-12 issued under the Securities Exchange Act of 1934 (the "Rule"), as the Rule may be amended or
supplemented from time to time, with respect to the Series 2008 Bonds, and shall have provided the Remarketing
Agent with such disclosure documents as the Remarketing Agent shall require in order to comply with the Rule, if
the Rule will be applicable upon such adjustment.
Section 1112. Arbitrage. The County agrees that money on deposit in any fund or account maintained
in connection with the Series 2008 Bonds, whether or not such money was derived from the proceeds of the sale of
the Series 2008 Bonds or from any other sources, and whether or not the Series 2008 Bonds are Outstanding
hereunder, (i) will not be used in a manner that would cause the Series 2008 Bonds to be "arbitrage bonds" within
the meaning of Section 148 of the Code and applicable regulations thereunder and (ii) will be used in a manner that
will cause the Series 2008 Bonds not to be "arbitrage bonds" within the meaning of Section 148 of the Code and
applicable regulations thereunder. The County shall observe and not violate the requirements of Section 148 of said
Code and any such applicable regulations. In the event the County is of the opinion that it is necessary to restrict or
limit the yield on the investment of money held by the Trustee pursuant to this Series Resolution, or to use such
money in certain manners, in order to avoid the Series 2008 Bonds being considered "arbitrage bonds" within the
meaning of Section 148 of the Code and the regulations thereunder as such may be applicable to the Series 2008
Bonds at such time, the County may issue to the Trustee a written certificate to such effect and appropriate
instructions, in which event the Trustee shall take such action as is necessary to restrict or limit the yield on such
investment or to use such money in accordance with such certificate and instructions, irrespective of whether the
Trustee shares such opinion.
Section 1113. Tax Covenant The County covenants to do and perform all acts and things permitted
by law and necessary to assure that interest paid on the Series 2008 Bonds that was excludable from the gross
income of the owners of federal income taxes on the Date of Original Issuance shall continue to be so excludable;
provided, however, that the County shall have no obligation to pay any amounts necessary to comply with this
covenant other than from Net Revenues or money received by the County from the Corporation.
Section 1114. Notice to Local Government Commission and Rating Agencies. The Local
Government Commission and each Rating Agency then rating the Series 2008 Bonds shall receive notice from the
Trustee of the following events: any change in the Trustee or the Tender Agent, if any; any material change in the
Bond Order or this Series Resolution; any acceleration of the Series 2008 Bonds; any amendment, expiration,
substitution, termination or renewal of or change to the Liquidity Facility or Credit Facility, if any; any conversion
from one Interest Period to another; any mandatory tender; the substitution of a new Remarketing Agent; and any
redemption or defeasance of the Series 2008 Bonds.
Section 111 S. Provisions Relating to Local Government Commission. The provisions contained
herein relating to any notice to, approval of or other action by the Local Government Commission may not be
amended, modified or supplemented without the prior written consent of the Loca] Governrent Commission. Any
such reference in this Series Resolution to the Local Government Commission shall include, in each case, any
authorized representative of the Local Government Commission.
Section 1116. Series Resolution Effective. This Series Resolution shall take effect immediately upon
its adoption.
57
Exhibit A
[Form of Series 2008 Bonds]
United States of America
State of North Carolina
County of New Hanover, North Carolina
Variable Rate Hospital Revenue Bond
(New Hanover Regional Medical Center) Series 2008 [~
R-
Maturity Date Dated of Original Issuance CUSIP
PRINCIPAL SUM:
REGISTERED OWNER: CEDE & CO.
MODE: WEEKLY
The County of New Hanover (the "County"),apolitical subdivision of the State of North Carolina, for
value received, hereby promises to pay, solely from the sources and in the manner hereinafter provided, to the
registered owner identified above, or registered assigns, on the maturity date set forth above (or earlier as hereinafter
referred to), upon the presentation and surrender hereof at the principal corporate trust office of First-Citizens Bank
& Trust Company, in Raleigh, North Carolina, as Paying Agent (the "Paying Agent"), the principal sum set forth
above and to pay interest as provided in the Series Resolution (as defined below).
Capitalized terms not defined herein shall have the meanings set forth in the Bond Order adopted by the
Board of Commissioners of the County (the "Board") on October 6, 1993, as amended by the First Supplemental
Bond Order adopted by the Board on January 5, 1999 and the Second Supplemental Bond Order adopted by the
Board on December 7, 2005 (collectively, the "Bond Order") and the Series Resolution adopted by the Board on
October 20, 2008 (the "Series Resolution"). Reference is made to the Bond Order and the Series Resolution for a
more complete statement of the provisions thereof and of the rights of the County, the Corporation, the Trustee and
the registered owners of the Series 2008 Bonds (as defined below). Copies of the Bond Order and the Series
Resolution are on file and may be inspected at the principal corporate trust office of the Trustee. By the purchase
and acceptance of this Bond, the registered owner hereof signifies assent to all of the provisions of the Bond Order
and the Series Resolution.
This Bond is a special obligation of the County under the Act (as defined in the Series Resolution). This
Bond is secured by a pledge of, and the principal of, the premium, if any, and interest on this Bond are payable
solely from the Net Revenues (as defined in the Bond Order) and the County's right to receive Net Revenues. This
Bond is also secured by the money and securities in the funds and accounts held by the Trustee under the Series
Resolution, and the income from the temporary investment thereof. This Bond does not constitute a debt of the
County for which the faith and credit and taxing power of the County are pledged, and the issuance of this Bond will
not directly or indirectly or contingently obligate the County to levy any tax or pledge any form of taxation for the
payment hereof.
This Bond is one of a duly authorized series of hospital revenue bonds of the County, designated "County
of New Hanover, North Carolina Variable Rate Hospital Revenue Bonds (New Hanover Regional Medical Center
Project) Series 2008[_]" (the "Series 2008[ ]Bonds"), issued pursuant to the Act, the Bond Order and the
Series Resolution for the purpose of providing funds, together with other available funds, to finance the capital costs
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of certain improvements to the Existing Facilities and Issuance Costs. Simultaneously with the issuance of the
Series 2008[_] Bonds, the County is issuing its County of New Hanover, North Carolina Variable Rate Hospital
Revenue Bonds (New Hanover Regional Medical Center Project) Series 2008 [_] (the "Series 2008[_] Bonds"
and, together with the Series 2008[_] Bonds, the "Series 2008 Bonds") to finance the capital costs of certain
improvements to the Existing Facilities and Issuance Costs.
The Series 2008 Bonds shall be issuable as registered bonds in Authorized Denominations. The Series
2008 Bonds, as initially issued, will be dated as of the Date of Original Issuance. Except as described in the next
sentence, subsequently issued Series 2008 Bonds will be dated as of the later of the Date of Original Issuance or the
most recent preceding Interest Payment Date therefor to which interest has been paid thereon. Series 2008 Bonds
issued on an Interest Payment Date therefor to which interest has been paid thereon will be dated as of such date.
Interest on the Series 2008 Bonds will be payable on each Interest Payment Date.
This Bond is registered on the Bond Register and may be transferred by the registered owner hereof at the
written request of such registered owner in person or by his duly authorized attorney, but only in the manner, subject
to the limitations and upon the payment of the charges provided in the Series Resolution and upon surrender and
cancellation of this Bond. Upon such transfer, a new fully registered bond or bonds, without coupons, of the same
maturity and of authorized denominations for the same aggregate principal amount, will be issued to the transferee
in exchange therefor.
The County, the Trustee, any Paying Agent and the Auction Agent may treat the registered owner of any
Series 2008 Bond as the absolute owner thereof for all purposes, whether or not such Series 2008 Bond shall be
overdue, and shall not be bound by any notice to the contrary. All payments of or on account of the principal of and
premium, if any, and interest on any such Bond as herein provided shall be made only to or upon the written order of
the registered owner thereof or his legal representative, but such registration may be changed as herein provided.
All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2008 Bond to
the extent of the sum or sums so paid.
The County, the Trustee and any Paying Agent shall not be required to register the transfer or exchange of
any Series 2008 Bond (i) after notice calling such Series 2008 Bond or portion thereof for redemption has been
mailed or (ii) during the fifteen day period next preceding the mailing of a notice of redemption of the Series 2008
Bonds of the same Series, if any, and maturity.
Interest on the Series 2008 Bonds shall be calculated on the basis of (i) a 365- or 366-day year, as
applicable, for the number of days actually elapsed, during a Daily Mode or a Weekly Mode, (ii) a 360-day year of
twelve 30-day months during a Term Rate Mode or a Fixed Rate Mode, and (iii) a 360-day year for the number of
days actually elapsed during an Auction Mode of 183 days or less and a 360 day year of twelve 30-day months
during an Auction Mode of more than 183 days.
The principal of, premium, if any, and interest on and the Redemption Price of the Series 2008 Bonds shall
be payable in currency of the United States of America which, at the respective dates of payment thereof, is legal
tender for the payment of public and private debts.
The principal or Redemption Price of the Series 2008 Bonds shall be payable by check in lawful money of
the United States of America upon presentation at the Principal Office of the Paying Agent to the Holders of the
Series 2008 Bonds on such date. Interest on the Series 2008 Bonds shall be paid to the Person whose name appears
on the Bond Register as the Holder thereof as of the close of business on the Record Date for each Interest Payment
Date. Payment of the interest on (i) any Series 2008 Bonds during a Daily Mode, a Weekly Mode or an Auction
Mode shall be made by wire transfer in immediately available funds to an account within the United States of
America designated by such Holder and (ii) any Series 2008 Bonds in a Term Rate Mode or a Fixed Rate Mode
shall be made by check mailed by first class mail to such Holder at its address as it appears on such registration
books, or, upon the written request of any Holder of at least $1,000,000 in aggregate principal amount of the Series
2008 Bonds, submitted to the Trustee at least five Business Days prior to the Record Date, by wire transfer in
immediately available funds to an account within the United States of America designated by such Holder.
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The Series 2008 Bonds are being issued by means of a book-entry system with no physical distribution of
bond certificates to be made except as provided in the Series Resolution. One bond certificate with respect to each
series of the Series 2008 Bonds are stated to mature, in the aggregate principal amount of each such series and
registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
("DTC"), is being issued and required to be deposited with DTC and immobilized in its custody. The book-entry
system will evidence ownership of the Series 2008 Bonds in the principal amount of $5,000 or any whole multiple
thereof, with transfers of ownership effected on the records of DTC and its participants pursuant to rules and
procedures established by DTC and its participants. Transfer of principal, interest and any redemption premium
payments to beneficial owners of the Series 2008 Bonds by participants of DTC will be the responsibility of such
participants and other nominees of such beneficial owners. The County will not be responsible or liable for such
transfers of payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants
or persons acting through such participants. While Cede & Co. is the registered owner of this Bond,
notwithstanding the provisions hereinabove contained, payments of principal of or redemption premium, if any, and
interest on this Bond shall be made in accordance with the existing arrangements between the Trustee and DTC.
Interest on the Series 2008 Bonds shall be calculated in accordance with the provisions of the Series
Resolution and shall be payable on each Interest Payment Date for the immediately preceding Interest Payment
Period. Notwithstanding the foregoing, Bank Bonds shall bear interest at the Bank Bond Rate and be payable as set
forth in the Liquidity Facility or the Credit Facility.
Initial Mode and Interest Rates; Subsequent Modes. The Series 2008 Bonds shall initially bear interest in
the Weekly Mode. The Series 2008 Bonds shall bear interest at the initial rates set by the initial purchasers thereof
until October 28, 2008 and thereafter at the Weekly Rates established for each subsequent Interest Period until and
unless such Series 2008 Bonds are converted to a different Mode as hereinafter provided or in accordance with the
provisions of the Series Resolution. The initial Tender Agent under the Series Resolution is First-Citizens Bank &
Trust Company. The initial Remarketing Agent for the Series 2008A Bonds is RBC Capital Markets Corporation
and the initial Remarketing Agent for the Series 2008B Bonds is Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
At any given time, a Series of the Series 2008 Bonds may operate in a different Mode. Within each Series,
all Series 2008 Bonds must operate in the same Mode and interest rate at any given time. A Series of the Series
2008 Bonds in any Mode, other than the Fixed Rate Mode, may be changed to any other Mode at the times and in
the manner hereinafter provided and in accordance with the provisions of the Series Resolution.
Determination of Interest Rates During the Daily Mode and the Weekly Mode. Interest on any Series 2008
Bonds in the Daily Mode and Weekly Mode shall accrue at the rate of interest per annum determined by the
Remarketing Agent on and as of the Rate Determination Date as the minimum rate of interest which, in the
judgment of the Remarketing Agent under then-existing market conditions, would result in the sale of such Series
2008 Bonds, on the Rate Determination Date, at a price equal to the Purchase Price. Such determination shall be
conclusive and binding upon the County, the Corporation, the Trustee, the Tender Agent (if any), the Paying Agent
(if any), the Liquidity Facility Provider (if any), the Credit Facility Provider (if any), the Remarketing Agent (if
any), the Auction Agent (if any), the Broker Dealers (if any) and the Bondholders (collectively, the "Interested
Parties").
During the Daily Mode, the Remarketing Agent shall establish the Daily Rate by 10:00 a.m. New York
City time on each Business Day. The Daily Rate for any day during the Daily Mode which is not a Business Day
shall be the Daily Rate established on the immediately preceding Business Day. The Remarketing Agent shall make
the Daily Rate available (i) by telephone to the Trustee, any requesting Bondholder or other Interested Party who
contacts the Remarketing Agent and (ii) by Immediate Notice to the Trustee by 2:00 p.m., New York City time on
the Business Day after the Rate Determination Date.
During the Weekly Mode, the Remarketing Agent shall establish the Weekly Rate by 10:00 a.m. New York
City time on each Rate Determination Date. The Weekly Rate shall be in effect (1) initially, from and including the
first day any Series 2008 Bonds become subject to the Weekly Mode to and including the following Tuesday and (2)
thereafter, from and including each Wednesday to and including the following Tuesday. The Remarketing Agent
shall make the Weekly Rate available (i) after 4:00 p.m. New York City time on the Rate Determination Date by
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telephone to the Trustee, any Bondholder or other Interested Party who contacts the Remarketing Agent and (ii) by
Immediate Notice to the Trustee not later than 2:00 p.m. New York City time on the Business Day after the Rate
Determination Date.
Determination of Term Rate. Upon any conversion to a Term Rate Mode, the length of the initial Interest
Period shall be designated by the County at the direction of the Corporation. During the Term Rate Mode, the
County shall designate at the direction of the Corporation an Interest Period succeeding the immediately preceding
Interest Period. Each such designation shall be made by the County's giving Immediate Notice thereof to the
Trustee, the Tender Agent (if any), the Remarketing Agent (if any) and the Liquidity Facility Provider (if any) or the
Credit Facility Provider (if any) which shall be given not later than the 10th Business Day preceding the proposed
Interest Period for such Series 2008 Bonds. The Term Rate established on each Rate Determination Date for Series
2008 Bonds in the Term Rate Mode shall be the minimum rate which, in the judgment of the Remarketing Agent,
will result in a sale of the Series 2008 Bonds in the Term Rate Mode at a price equal to the Purchase Price on the
first day of the Interest Period immediately succeeding the Rate Determination Date.
Prior to any conversion of the Series 2008 Bonds to a Term Rate Mode, the County, at the direction of the
Corporation, shall obtain a Liquidity Facility or Credit Facility that meets the requirements of the Series Resolution
to pay the Purchase Price on the Purchase Date during the Term Rate Period.
Once Series 2008 Bonds are changed to the Term Rate Mode, such Series 2008 Bonds will continue in the
Term Rate Mode until changed to another Mode in accordance with the provisions of the Series Resolution. The
Term Rate shall be determined by the Remarketing Agent not later than 4:00 p.m. New York City time on the Rate
Determination Date. After 4:00 p.m. New York City time on the Rate Determination Date, the Remarketing Agent
shall make the Term Rate available by telephone to the Interested Parties. The Remarketing Agent shall provide
Immediate Notice of the Term Rate to the Interested Parties no later than the second Business Day after the Rate
Determination Date.
Determination of Fixed Rate. At the option of the County, upon the direction of the Corporation, Series
2008 Bonds not bearing interest at Fixed Rates may be converted to bear interest at Fixed Rates to the Maturity
Dates thereof in the manner provided in the Series Resolution. The Remarketing Agent shall determine the Fixed
Rate for each maturity of the Series 2008 Bonds to be converted to the Fixed Rate Mode not later than 4:00 p.m.
New York City time on the Rate Determination Date as provided in the Series Resolution. The Fixed Rates shall be
the rate or rates determined in accordance with the Series Resolution. The Remarketing Agent shall make the Fixed
Rates available by telephone to the Corporation or the County and the Tender Agent. Upon request of any
Interested Party, the Trustee shall give Immediate Notice of such rate. Such determination shall be conclusive and
binding upon the Interested Parties.
Alternate Rate for Interest Calculation. In the case of Series 2008 Bonds other than Series 2008 Bonds in
the Auction Mode, if (a) the Remarketing Agent fails or is unable to determine the interest rate(s) or Interest Periods
with respect to any Series 2008 Bonds, or (b) the method of determining the interest rate(s) or Interest Periods with
respect to any Series 2008 Bonds shall be held to be unenforceable by a court of law of competent jurisdiction, such
Series 2008 Bonds shall thereupon, until such time as the Remarketing Agent again makes such determination or
until there is delivered an Opinion of Counsel to the effect that the method of determining such rate is enforceable,
bear interest from the last date on which such rate was deternined in the case of clause (a) and from the date on
which interest was legally paid in the case of clause (b), at the Alternate Rate for the Mode then in effect.
Change to Auction Mode. At the option of the County, upon the direction of the Corporation, the Series
2008 Bonds bearing interest in another Mode (other than the Fixed Rate Mode) may be changed to the Auction
Mode pursuant to the Series Resolution and the initial Auction Period Rate for such Auction Mode shall be
determined by the Remarketing Agent upon conversion to the Auction Mode. Thereafter the Auction Period Rate to
be applicable to the Series 2008 Bonds in the Auction Mode during each Auction Period shall be determined by the
Auction Agent and notice thereof shall be given, all as provided in Exhibit B to the Series Resolution.
Changes in Mode. Subject to the provisions of the Series Resolution, the Corporation may effect a change
in Mode with respect to all or any Series of Series 2008 Bonds, other than Series 2008 Bonds in the Fixed Rate
Mode, by following the procedures set forth in subparagraphs (A) and (B) below.
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(A) Each Series of Series 2008 Bonds (other than a Series of Series 2008 Bonds in the Fixed Rate
Mode, which must remain in the applicable Mode, and Series 2008 Bonds proposed to be changed to the Fixed
Rate Mode which shall be governed by Subsection (B) below) may be changed from one Mode to another Mode as
follows:
(1) No later than the 20th day preceding the proposed Mode Change Date, the Corporation
shall give Immediate Notice to the County, the Trustee, the Tender Agent (if any), the Remarketing Agent
(if any), the Auction Agent (if any), the Broker-Dealer (if any), the Liquidity Facility Provider (if any) and
the Credit Facility Provider (if any) specifying the series of Series 2008 Bonds to which such notice relates
and its intention to effect a change in the Mode from the Mode then in effect (the "Current Mode") to
another Mode (the "New Mode") specified in such written notice, if the change is to a Term Rate Mode,
the length of the initial Interest Period, and, if the change is to an Auction Mode, the length of the initial
Auction Period. Notice of the mandatory purchase on the Mandatory Purchase Date resulting from the
proposed change in Mode shall be given to the Holders pursuant to the Series Resolution.
(2) The New Mode shall commence on the Mode Change Date and the interest rate(s) with
respect to the series of Series 2008 Bonds in the New Mode shall be determined by the Remarketing Agent
in the manner provided in the Series Resolution or in the case of Series 2008 Bonds in the Auction Mode,
by the Auction Agent as provided in the Series Resolution.
(3) Conditions Precedent.
(a) The Mode Change Date will be a Business Day.
(b) The Mode Change Date in the case of a change from the Term Rate Mode, shall
be the Purchase Date for the current Interest Period.
(c) The Trustee, the Corporation, the County, the Tender Agent (if any), the
Auction Agent (if any), the Liquidity Facility Provider (if any), the Credit Facility Provider (if
any) and the Remarketing Agent (if any) shall have received on the Mode Change Date a
Favorable Opinion of Bond Counsel dated the Mode Change Date and addressed to the Trustee,
the County, the Tender Agent (if any), the Auction Agent (if any), the Broker-Dealers (if any), the
Liquidity Facility Provider (if any), the Credit Facility Provider (if any) and the Remarketing
Agent.
(d) If the Current Mode is a Mode other than an Auction Mode and the New Mode
is an Auction Mode, the Corporation shall have appointed an Auction Agent and aBroker-Dealer
or Dealers.
(e) If the Current Mode is the Auction Mode, the Corporation shall have appointed
a Remarketing Agent, a Tender Agent and a Liquidity Facility Provider or a Credit Facility
Provider (other than in the case of a change to a Fixed Rate Mode).
(f) The County shall deliver to the Tender Agent a Liquidity Facility or Credit
Facility meeting the requirements hereof if such a Liquidity Facility or Credit Facility is required
to be in effect under the terms hereof and of the Series Resolution. If there shall be no Liquidity
Facility in effect to provide funds for the purchase of Series 2008 Bonds to be converted to the
New Mode on the Mode Change Date, the remarketing proceeds available on the Mode Change
Date shall be not less than the amount required to purchase all of the Series 2008 Bonds that are
converting on such Mode Change Date at the Purchase Price.
(g) Any designation of a New Mode shall be accompanied by an approval in writing
of such change in Mode by a duly authorized officer of the County.
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(4) If the foregoing conditions have not been satisfied by the Mode Change Date, the New
Mode shall not take effect for the Series 2008 Bonds proposed to be converted to a New Mode, such
Series 2008 Bonds shall not be subject to mandatory tender and purchase on the proposed Mode Change
Date and: (a) if the change was from an Auction Mode, the Series 2008 Bonds proposed to be changed to
the New Mode shall remain in the Auction Mode and the Auction Period shall automatically convert to a
seven day period commencing on the failed Mode Change Date and the interest rate borne by the Series
2008 Bonds proposed to be changed to the New Mode during the Auction Period commencing on such
failed Mode Change Date shall be the Maximum Rate until the first Auction Date after the proposed Mode
Change Date; (b) if the change was from a Term Rate Mode, the Series 2008 Bonds proposed to be
changed to the New Mode shall, subject to the provisions of the Series Resolution, stay in the Term Rate
Mode for an Interest Period ending on the next Stated Interest Payment Date and shall bear interest at the
Alternate Rate and (c) if the change was from a Weekly Mode or a Daily Mode, the Series 2008 Bonds
proposed to be changed to the New Mode shall stay in the Weekly Mode or the Daily Mode, as the case
may be.
(5) Prior to any conversion of the Series 2008 Bonds to a Daily Mode, a Weekly Mode or a
Term Rate Mode, the County, at the direction of the Corporation, shall obtain a Liquidity Facility or Credit
Facility that meets the requirements of the Series Resolution to pay the Purchase Price on the Purchase
Date.
(B) At the option of the County, upon the direction of the Corporation, any series of Series 2008
Bonds not already in the Fixed Rate Mode may be changed to the Fixed Rate Mode as provided in the Series
Resolution. Not less than 45 days (or such shorter time as maybe agreed to by the Trustee, the Remarketing Agent
and the Auction Agent) before the proposed Mode Change Date, the Corporation shall give written notice to the
Trustee, the County, the Tender Agent (if any), the Auction Agent (if any), the Broker-Dealers (if any), the Local
Government Commission, the Liquidity Facility Provider (if any), the Credit Facility Provider (if any) the
Remarketing Agent (if any) and each Rating Agency then rating the Series 2008 Bonds proposed to be changed to
the New Mode stating that the Mode will be changed to the Fixed Rate Mode and setting forth the proposed Mode
Change Date. Any such change in Mode shall be made as follows:
(1) The Mode Change Date will be a Business Day and, in the case of a change from the
Term Rate Mode, the Mode Change Date shall be the Purchase Date for the current Interest Period.
(2) Not less than the 30th day next preceding the Mode Change Date, the Trustee shall mail a
notice of such proposed change to the Holders of the Series 2008 Bonds proposed to be changed to the
Fixed Rate stating that the Mode will be changed to the Fixed Rate Mode, the proposed Mode Change
Date and that such Holder is required to tender such Holder's Series 2008 Bonds proposed to be changed
to the Fixed Rate for purchase on such proposed Mode Change Date.
(3) The change to the Fixed Rate Mode shall not occur unless the County, the Trustee, the
Remarketing Agent (if any) and the Auction Agent (if any) have received, on the Mode Change Date, a
Favorable Opinion of Bond Counsel dated the Mode Change Date and addressed to the County, the
Corporation, the Trustee, the Remarketing Agent (if any) and the Auction Agent (if any).
(4) Prior to the conversion to the Fixed Rate Mode, the certificate of the Remarketing Agent
described in the Series Resolution shall be provided to the Trustee, the County and the Corporation.
(5) Prior to the conversion to the Fixed Rate Mode, a firm underwriting or purchase contract
from a recognized firm of bond underwriters or recognized institutional investors to underwrite or
purchase all Series 2008 Bonds proposed to be changed to the Fixed Rate which are to be converted on
such Mode Change Date at a price of 100% of the principal amount thereof, which contract may be subject
to conditions to purchase, shall be provided to the County, the Local Government Commission and the
Corporation.
(6) If any of the foregoing conditions have not been satisfied on or prior to the Mode Change
Date, the Fixed Rate Mode shall not become effective and all Series 2008 Bonds proposed to be changed
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to the Fixed Rate Mode shall not be subject to mandatory tender and purchase on the proposed Mode
Change Date and: (a) if the change was from an Auction Mode, such Series 2008 Bonds proposed to be
changed to the Fixed Rate shall remain in the Auction Mode, the Auction Period shall automatically
convert to a seven day period commencing on the failed Mode Change Date and the interest rate for such
Series 2008 Bonds during the Auction Period commencing on such failed Mode Change Date shall be the
Maximum Rate until the first Auction Date after the proposed Mode Change Date, (b) if the change was
from a Term Rate Mode then all of the Series 2008 Bonds in such Mode shall stay in the Term Rate Mode
for an Interest Period ending on the next Stated Interest Payment Date and shall bear interest at the
applicable Alternate Rate and (c) if the change was from a Weekly Mode or a Daily Mode, the Series 2008
Bonds proposed to be changed to the Fixed Rate Mode, shall stay in the Weekly Mode or the Daily Mode,
as the case may be.
(7) Notwithstanding anything to the contrary stated in the Series Resolution, the interest rate
on all of the Series 2008 Bonds shall be converted to a Fixed Rate (a) upon failure of the Liquidity Facility
Provider or the Credit Facility Provider to purchase the Series 2008 Bonds when required, (b) upon the
expiration or termination of the Liquidity Facility or Credit Facility with no substitution therefore, (c) if
the Series 2008 Bonds are held as Bank Bonds for forty-five (45) days or more in any bond year or there
are two failed remarketings of the Series 2008 Bonds, (d) if the Bank Bonds bear interest at the Maximum
Rate, or (e) if the County and the Corporation fail to provide for a Substitute Liquidity Facility or
Substitute Credit Facility when required.
Defaulted Interest. Defaulted Interest with respect to any Series 2008 Bond shall cease to be payable to the
holder of such Series 2008 Bond on the relevant Record Date and shall be payable to the holder in whose name such
Series 2008 Bond is registered at the close of business of the Trustee on the Special Record Date for the payment of
such Defaulted Interest, which shall be fixed as provided in the Series Resolution.
Extraordinary Redemption. The Series 2008 Bonds are subject to redemption by the County at the
direction of the Corporation in whole or in part on any date at a Redemption Price equal to 100% of the principal
amount thereof, without premium, plus accrued interest to the Redemption Date, to the extent available from Net
Proceeds (as defined in the Bond Order) resulting from insurance carried or maintained with respect to the Health
Care System as required by the Bond Order, and Net Proceeds resulting from Eminent Domain (as defined in the
Bond Order) proceedings, pursuant to the Bond Order, to the extent such Net Proceeds exceed 10% of Net Book
Value (as defined in the Bond Order). The Series 2008 Bonds are also subject to mandatory redemption in whole
only on any date to the extent available from money deposited by the Corporation in the Redemption Fund at a
Redemption Price equal to 100% of the principal amount thereof, without premium, plus accrued interest to the
Redemption Date in the event that, by reason of any change in any federal or State law or of any legislative,
administrative or judicial action or administrative failure of action, (i) the Lease becomes unenforceable or
impossible to perform without unreasonable delay or (ii) unreasonable burdens or excessive liabilities are imposed
on the County or the Corporation, including, without limitation, the imposition of federal, state or other ad valorem
property, income or other taxes not being imposed on the date of the Lease.
Optional Redemption.
(1) Optional Redemption of Series 2008 Bonds in the Daily Mode or the Weekly Mode. Series 2008
Bonds in the Daily Mode or the Weekly Mode are subject to redemption prior to their Maturity Date, by the County,
at the direction of the Corporation, in whole on any date or in part on any Interest Payment Date (and in any
Authorized Denomination) at a Redemption Price equal to 100% of the principal amount of Series 2008 Bonds
called for redemption, without premium, together with accrued interest, if any, from the end of the preceding Interest
Period to the Redemption Date.
(2) Optional Redemption of Series 2008 Bonds in the Term Rate Mode or the Fixed Rate Mode.
(a) The Series 2008 Bonds in a Term Rate Mode are subject to redemption prior to the
Maturity Date by the County, at the direction of the Corporation, in whole or in part on their Purchase Date at a
Redemption Price equal to 100% of the principal amount of the Series 2008 Bonds called for redemption, without
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premium, together with accrued interest, if any, to the Redemption Date.
(b) In addition to the redemption provision described in (a) above, Series 2008 Bonds in a
Term Rate Mode or the Fixed Rate Mode are subject to redemption by the County, at the direction of the
Corporation, in whole on any date or in part on any Interest Payment Date at the Redemption Prices set forth below,
together with accrued interest, if any, to the Redemption Date:
LENGTH OF INTEREST COMMENCEMENT OF
PERIOD REDEMPTION PERIOD REDEMPTION PRICE
Greater than or equal to Tenth anniversary of the 100% or such alternate Redemption
15 years commencement of Interest Price up to a maximum of 101%
Period ("Alternate Redemption Price"),
provided that a Favorable Opinion of
Bond Counsel is delivered with
respect to the establishment of such
Alternate Redemption Price
Less than 15 years and Seventh anniversary of the 100% or an Alternate Redemption
greater than or equal to commencement of Interest Price, provided that a Favorable
10 years Period Opinion of Bond Counsel is
delivered with respect to the
establishment of such Alternate
Redemption Price
Less than 10 years and Third anniversary of the 100% or an Alternate Redemption
greater than or equal to commencement of Interest Price, provided that a Favorable
5 years Period Opinion of Bond Counsel is
delivered with respect to the
establishment of such Alternate
Redemption Price
Less than 5 years Series 2008 Bonds not subject Not Applicable
to optional redemption
pursuant to this subparagraph
(b)
In connection with a conversion to a Term Rate Mode or the Fixed Rate Mode, the County, at the discretion
of the Corporation, may waive or otherwise alter its rights to direct the redemption of the Series 2008 Bonds at any
time without premium; provided that notice describing the waiver or alteration shall be submitted to the Paying
Agent (if any), the Trustee and the Remarketing Agent (if any), together with a Favorable Opinion of Bond Counsel,
addressed to them.
(3) Optional Redemption of Series 2008 Bonds in the Auction Mode. Series 2008 Bonds in the
Auction Mode are subject to redemption prior to the Maturity Date, at the option of the County with the consent of
the Corporation, in whole or in part on any Interest Payment Date, at a Redemption Price equal to the principal
amount of the Series 2008 Bonds called for redemption, without premium, together with accrued interest, if any, to
the Redemption Date.
Mandatory Sinking Fund Redemption. The Series 2008 Bonds shall be redeemed pursuant to mandatory
sinking fund redemption on the first Business Day of October in the following years and amounts at a Redemption
Price equal to 100% of the principal amount of such Series 2008 Bonds to be redeemed, plus accrued interest to the
Redemption Date:
A-8
PrinciRal Amount of Principal Amount of
Year Series 2008A Bonds Series 2008B Bonds
2009 $335,000 $335,000
2010 370,000 370,000
2011 385,000 385,000
2012 400,000 400,000
2013 415,000 415,000
2014 435,000 435,000
2015 450,000 450,000
2016 465,000 465,000
2017 485,000 485,000
2018 505,000 505,000
2019 525,000 525,000
2020 550,000 550,000
2021 570,000 570,000
2022 595,000 595,000
2023 615,000 615,000
2024 640,000 640,000
2025 670,000 670,000
2026 695,000 695,000
2027 725,000 725,000
2028 750,000 750,000
2029 785,000 785,000
2030 815,000 815,000
2031 845,000 845,000
2032 880,000 880,000
2033 915,000 915,000
2034 955,000 955,000
2035 995,000 995,000
2036 1,035,000 1,035,000
2037 1,075,000 1,075,000
203 8 1,120,000 1,120,000
Notwithstanding the foregoing, when any Series 2008 Bonds in the Auction Mode are to be redeemed by
mandatory sinking fund redemption as described above, if such October 1 is not an Interest Payment Date for the
Auction Mode, then the mandatory Sinking Fund Account redemption shall occur on the Interest Payment Date
immediately preceding such October 1.
The amounts referred to above shall be reduced (i) by the amount of Series 2008 Bonds acquired and
delivered in accordance with the Series Resolution in satisfaction of such Sinking Fund Account requirements and
(ii) in connection with a partial redemption of Series 2008 Bonds if the Corporation elects to reduce mandatory
Sinking Fund Account redemptions for the Series 2008 Bonds in the manner provided in the Series Resolution.
Payment or redemption of the Series 2008 Bonds through the Sinking Fund Account shall be without premium. The
Series 2008 Bonds shall be redeemed by the Trustee pursuant to the provisions of this paragraph without any notice
from or direction by the County or the Corporation.
Mandatory Redemption of Bank Bonds. The County shall redeem Bank Bonds that are subject to
mandatory redemption pursuant to the Liquidity Facility or the Credit Facility at the time or times required by the
Liquidity Facility or the Credit Facility at a Redemption Price of 100% of the principal amount of Bank Bonds to be
redeemed plus accrued interest, if any, to the Redemption Date. The Bank Bonds shall be redeemed by the Trustee
pursuant to the provisions here without any notice from or direction by the County or the Corporation; it being
A-9
understood and agreed, however, that only Bank Bonds held by the Liquidity Facility Provider or the Credit Facility
Provider shall be so redeemed.
Purchase in Lieu of Redemption. In lieu of redeeming Series 2008 Bonds, the Trustee may, at the request
of the County, upon the direction of the Corporation, use such funds otherwise available hereunder for redemption
of Series 2008 Bonds to purchase Series 2008 Bonds identified by the County, upon the direction of the
Corporation, at a price specified by the County, upon the direction of the Corporation, not exceeding the
Redemption Price then applicable hereunder. In the case of any optional or extraordinary redemption or any
purchase and cancellation of term Series 2008 Bonds, the Trustee shall apply as a credit against the required Sinking
Fund Account deposits with respect to such term bonds the amount of such term bonds in such order as the County,
upon the direction of the Corporation, elects in writing prior to such optional or extraordinary redemption or
purchase and cancellation or, if no election is made, in the inverse order thereof. The Trustee shall cancel all such
Series 2008 Bonds purchased pursuant to this paragraph.
General Redemption Provisions. Not less than 30 days but not more than 60 days before the redemption
date of any Series 2008 Bonds, whether such redemption be in whole or in part, the Trustee shall cause a notice of
any redemption signed by the Trustee to be mailed, postage prepaid, to all Holders owning Series 2008 Bonds to be
redeemed in whole or in part provided that notice to the Securities Depository shall be sent in accordance with the
Securities Depository's policies and procedures. Failure to mail any such notice to any Holder or any defect in any
notice so mailed shall not affect the validity of the proceedings for the redemption of the Series 2008 Bonds of any
other Holders to whom notice was properly given. Each such notice shall set forth: the CUSIP numbers and bond
certificate numbers of the Series 2008 Bonds to be redeemed, the interest rate of the Series 2008 Bonds to be
redeemed, the Date of Original Issuance of the Series 2008 Bonds to be redeemed, the Redemption Date, the
Redemption Price to be paid, the maturities of the Series 2008 Bonds to be redeemed and, in the case of Series 2008
Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed, the address and
telephone number of the Trustee, the date of the redemption notice, and that on the Redemption Date the Series 2008
Bonds called for redemption will be payable at the principal corporate trust office of the Trustee, that from that date
interest will cease to accrue and be payable and that no representation is made as to the accuracy or correctness of
the CUSIP numbers printed therein or on the Series 2008 Bonds. If any Series 2008 Bond is to be redeemed in part
only, the notice of redemption shall state also that on or after the Redemption Date, upon surrender of such Series
2008 Bond, a new Series 2008 Bond in principal amount equal to the unredeemed portion of such Series 2008 Bond
will be issued.
Any notice of redemption, except a notice of redemption in respect of a mandatory sinking fund
redemption, at the direction of the Corporation, may state that the redemption to be effected is conditioned upon the
receipt by the Trustee on or prior to the Redemption Date of moneys sufficient to pay the principal of and premium,
if any, and interest on the Series 2008 Bonds or portions thereof to be redeemed, and if such moneys are not so
received, such notice shall be of no force or effect and such Series 2008 Bonds shall not be required to be redeemed.
In the event that such notice contains such a condition and moneys sufficient to pay the principal of and premium, if
any, and interest on such Series 2008 Bonds are not received by the Trustee on or prior to the Redemption Date, the
redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in
which the notice of redemption was given, that such moneys were not so received.
The Series 2008 Bonds shall be redeemed only in Authorized Denominations. If less than all of a series of
the Series 2008 Bonds, as the case may be, shall be called for redemption, the Trustee shall select such Series 2008
Bonds to be redeemed by lot; provided, however, that following such redemption no Series 2008 Bond shall be
outstanding in a denomination other than an Authorized Denomination; and provided further that so long as the sole
Owner of a series of the Series 2008 Bonds, as the case may be, is Securities Depository Nominee, such selection
shall be made by the Securities Depository; and provided further that the Bank Bonds or the Pledged Bonds of each
series shall be redeemed prior to any other Series 2008 Bonds of such series.
No redemption (other than a mandatory redemption of Bank Bonds under the Series Resolution) of less
than all of the Series 2008 Bonds of a series at the time outstanding shall be made pursuant to the Series Resolution
unless (i) the aggregate principal amount of such Series 2008 Bonds to be redeemed is equal to or greater than
$100,000 and (ii) the Series 2008 Bonds are redeemed in Authorized Denominations.
A-10
If less than all of a Series 2008 Bond is selected for redemption, the Owner thereof shall present and
surrender such Series 2008 Bond to the Trustee for payment of the principal amount thereof so called for
redemption, and the redemption premium, if any, on such principal amount, and the County shall, if necessary,
execute and the Trustee shall authenticate and deliver to or upon the order of such Owner, without charge, for the
unredeemed portion of the principal amount of the Series 2008 Bond so surrendered, a new Series 2008 Bond of the
same maturity and designation, bearing interest at the same rate of any Authorized Denominations.
Series 2008 Bonds presented and surrendered in accordance with the provisions hereof shall be canceled
upon the surrender thereof.
On or before the date upon which Series 2008 Bonds are to be redeemed, the County shall deposit, or cause
to be deposited, with the Trustee money or Government Obligations, or a combination of both, that will be sufficient
to pay on the Redemption Date the Redemption Price of, and interest accruing on, the Series 2008 Bonds or portions
thereof to be redeemed on such Redemption Date.
On or before the date upon which Series 2008 Bonds are to be redeemed, the County shall deposit, or cause
to be deposited, with the Trustee money or Defeasance Obligations, or a combination of both, that will be sufficient
to pay on the Redemption Date the Redemption Price of, and interest accruing on, the Series 2008 Bonds or portions
thereof to be redeemed on such Redemption Date.
On the Redemption Date, notice having been given in the manner and under the conditions hereinabove
provided, the Series 2008 Bonds or portions thereof called for redemption shall be due and payable at the
Redemption Price provided therefor, plus accrued interest to such date (except in the case of a conditional
redemption authorized by the Series Resolution if moneys are not so available), and if moneys sufficient to pay the
Redemption Price of the Series 2008 Bonds or portions thereof to be redeemed plus accrued interest thereon to the
Redemption Date are held by the Trustee in trust for the owners of the Series 2008 Bonds or portions thereof to be
redeemed, interest on the Series 2008 Bonds or portions thereof called for redemption shall cease to accrue on such
Redemption Date; such Series 2008 Bonds or portions thereof shall cease to be entitled to any benefits or security
under the Bond Order or the Series Resolution or to be deemed Outstanding; and the owners of such Series 2008
Bonds or portions thereof shall have no rights in respect thereof except to receive payment of the Redemption Price
thereof, plus accrued interest to the Redemption Date.
Optional Tenders of Series 2008 Bonds in the Daily Mode or the Weekly Mode. The Holders of Eligible
Bonds in a Daily Mode or a Weekly Mode may elect to have their Series 2008 Bonds (or portions of those Series
2008 Bonds in amounts equal to integral multiples of the lowest then applicable Authorized Denomination)
purchased on any Business Day at a price equal to the Purchase Price,
(i) in the case of Series 2008 Bonds in the Daily Mode, upon delivery of an
irrevocable telephonic notice of tender to the Remarketing Agent and the Tender Agent not later
than 10:00 a.m. New York City time on the Purchase Date specified by the Holder; and
(ii) in the case of Series 2008 Bonds in the Weekly Mode, upon delivery of an
irrevocable written notice of tender or irrevocable telephonic notice of tender to the Remarketing
Agent and the Tender Agent, promptly confirmed in writing to the Tender Agent, not later than
4:00 p.m. New York City time on a Business Day not less than 7 days before the Purchase Date
specified by the Holder in such notice.
Such notices of tender shall state the CUSIP number, series, Series 2008 Bond number (if the Series 2008
Bond is not registered in the name of the Securities Depository) and the principal amount of the portion of such
Series 2008 Bond to be optionally tendered and that such portion shall be purchased on the Purchase Date specified
above. Payment of the Purchase Price shall be made pursuant to the preceding paragraph only if the Series 2008
Bond so delivered to the Tender Agent conforms in all respects to the description thereof in the notice described in
this paragraph and the preceding paragraph. A Holder who gives the notice of tender as set forth above may
repurchase the Series 2008 Bonds so tendered on such Purchase Dates if the Remarketing Agent agrees to sell the
Series 2008 Bonds so tendered to such Holder. If such Holder decides to repurchase such Series 2008 Bonds and
the Remarketing Agent agrees to sell the specified Series 2008 Bonds to such Holder, the delivery requirements set
A-11
forth in the Series Resolution shall be waived. The Tender Agent may assume that a Series 2008 Bond is an Eligible
Bond unless it has actual knowledge to the contrary.
Mandatory Purchase at End of Interest Period for Term Rate Mode. Series 2008 Bonds in the Term Rate
Mode are subject to mandatory purchase on the Purchase Date for the current Interest Period at the Purchase Price.
The Trustee shall give notice by first-class mail, postage prepaid, of such mandatory purchase to the Holders of such
Series 2008 Bonds no less than 30 days prior to the Mandatory Purchase Date. The notice shall state the Mandatory
Purchase Date, the Purchase Price and that interest on such Series 2008 Bonds shall cease to accrue from and after
the Mandatory Purchase Date. The failure to give such notice with respect to any Series 2008 Bond shall not affect
the validity of the mandatory purchase of any other Series 2008 Bond with respect to which notice was so given.
Any notice properly sent will be conclusively presumed to have been given, whether or not actually received by any
Holder.
Mandatory Purchase on Mode Change Date. Series 2008 Bonds to be changed from one Mode to another
Mode (other than a change to the Fixed Rate Mode, which Series 2008 Bonds are subject to mandatory purchase
pursuant to the next paragraph are subject to mandatory purchase on the Mode Change Date at the Purchase Price.
The Trustee shall give notice by first-class mail, postage prepaid, of such mandatory purchase to the Holders of such
Series 2008 Bonds no less than 15 days prior to the Mandatory Purchase Date. The notice shall state the Mandatory
Purchase Date, the Purchase Price and that interest on such Series 2008 Bonds shall cease to accrue from and after
the Mandatory Purchase Date. The failure to give such notice with respect to any Series 2008 Bond shall not affect
the validity of the mandatory purchase of any other Series 2008 Bond with respect to which notice was so given.
Any notice properly sent will be conclusively presumed to have been given, whether or not actually received by any
Holder.
Series 2008 Bonds to be changed to the Fixed Rate Mode are subject to mandatory purchase on the Mode
Change Date at the Purchase Price (subject to the provisions of the Series Resolution). The Trustee shall give notice
by first-class mail, postage prepaid of such mandatory purchase as part of the notice, of change of Mode to be sent to
Holders pursuant to the Series Resolution. The failure to give such notice with respect to any Series 2008 Bond
shall not affect the validity of the mandatory purchase of any other Series 2008 Bond with respect to which notice
was so given. Any notice properly sent will be conclusively presumed to have been given, whether or not actually
received by any Holder.
Mandatory Purchase on Expiration Date, Substitute Liquidity Facility Date and Substitute Credit Facility
Date and Termination of Liquidity Facility and Credit Facility. On each Substitute Liquidity Facility Date and
Substitute Credit Facility Date, and on the second Business Day preceding each Expiration Date, if such Series 2008
Bond is an Eligible Bond it shall be subject to mandatory purchase on such date at the Purchase Price. The Trustee
shall give notice of such mandatory purchase by mail to the Holders of the Series 2008 Bonds involved no less than
10 days prior to such Mandatory Purchase Date. The notice shall state the Mandatory Purchase Date, the Purchase
Price and that interest on such Series 2008 Bonds shall cease to accrue from and after the Mandatory Purchase Date.
The failure to give such notice with respect to any Series 2008 Bond shall not affect the validity of the mandatory
purchase of any other Series 2008 Bond with respect to which notice was so given. Any notice mailed will be
conclusively presumed to have been given, whether or not actually received by any Holder.
On the second Business Day preceding each Notice Termination Date applicable to a Series 2008 Bond, if
such Series 2008 Bond is an Eligible Bond it shall be subject to mandatory purchase on such date at the principal
amount thereof, plus accrued interest, if any, with respect thereto to the Notice Termination Date. The Tender
Agent shall give notice of such mandatory purchase by first-class mail, postage prepaid, to the Holders of the Series
2008 Bonds no later than the Business Day after receipt of a notice of termination from the Liquidity Facility
Provider. The notice shall state the Mandatory Purchase Date, the Purchase Price and that interest on such Series
2008 Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure to give such notice with
respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008
Bond with respect to which notice was so given. Any notice mailed will be conclusively presumed to have been
given, whether or not actually received by any Holder.
No mandatory purchase shall occur as a result of the occurrence of an Immediate Termination Date. If the
Tender Agent shall receive notice of the occurrence of an Immediate Termination Date, then it shall cause the
A-12
Trustee to notify the Local Government Commission and the Holders within one Business Day following its receipt
of such notice that an Immediate Termination Date has occurred.
The Tender Agent may assume that a Series 2008 Bond is an Eligible Bond unless it has actual knowledge
that such Series 2008 Bond is not an Eligible Bond.
Mandatory Purchase at Direction of the Corporation or the Credit Facility Provider. So long as the Series
2008 Bonds are in the Daily Mode or the Weekly Mode, the Series 2008 Bonds are subject to mandatory purchase
on any Business Day designated by the Corporation, with the written consent of the Remarketing Agent and the
Liquidity Facility Provider or the Credit Facility Provider at the Purchase Price, payable in immediately available
funds. Such purchase date shall be a Business Day not earlier than the 10th day following the second Business Day
after receipt by the Trustee of written notice of such designation. The Trustee shall give notice by first-class mail,
postage prepaid, of such mandatory purchase to the Holders of such Series 2008 Bonds no less than 15 days prior to
the Mandatory Purchase Date. The notice shall state the Mandatory Purchase Date, the Purchase Price and that
interest on such Series 2008 Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure to
give such notice with respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of any
other Series 2008 Bond with respect to which notice was so given. Any notice properly sent will be conclusively
presumed to have been given, whether or not actually received by any Holder.
If a Credit Facility is in effect, the Series 2008 Bonds are subject to mandatory purchase at the Purchase
Price, payable in immediately available funds, on the fourth Business Day after receipt by the Trustee of a written
notice from the Credit Facility Provider that an "event of default" under the Credit Facility Provider Agreement has
occurred and is continuing and a written request from the Credit Facility Provider that all of the Series 2008 Bonds
be required to be tendered for purchase. The Trustee shall give notice by first-class mail, postage prepaid, of such
mandatory purchase to the Holders of such Series 2008 Bonds no less than 3 days prior to the Mandatory Purchase
Date. The notice shall state the Mandatory Purchase Date, the Purchase Price and that interest on such Series 2008
Bonds shall cease to accrue from and after the Mandatory Purchase Date. The failure to give such notice with
respect to any Series 2008 Bond shall not affect the validity of the mandatory purchase of any other Series 2008
Bond with respect to which notice was so given. Any notice properly sent will be conclusively presumed to have
been given, whether or not actually received by any Holder.
For payment of the Purchase Price on the Mandatory Purchase Date, the Series 2008 Bonds must be
delivered at or prior to 12:00 noon on the Mandatory Purchase Date. If delivered after that time, the Purchase Price
shall be paid on the next succeeding Business Day. The Purchase Price shall be payable only upon surrender of such
Series 2008 Bonds to the Tender Agent at its principal office for delivery of Series 2008 Bonds, accompanied by an
instrument of transfer, in form satisfactory to the Tender Agent, executed in blank by the Holder or its duly
authorized attorney, with such signature guaranteed by a commercial bank, trust company or member firm of the
New York Stock Exchange.
Inadequate Funds for Tenders. Except as provided in the next succeeding paragraph, the County may, but
shall not be required to, pay the Purchase Price of any Series 2008 Bonds tendered for purchase on any Purchase
Date or Mandatory Purchase Date if moneys for such purchase are not otherwise available from the sources
specified in the Series Resolution. Failure by the County to pay the Purchase Price of any Series 2008 Bonds
tendered for purchase on any Purchase Date or Mandatory Purchase Date when due, if moneys for such purchase are
not otherwise available from the sources specified in the Series Resolution, shall not constitute an Event of Default
under the Bond Order or this Series Resolution until 90 days after the Failed Purchase Date (defined below) as
provided in the Series Resolution.
If the funds available for purchases of Eligible Bonds pursuant to the Series Resolution are inadequate for
the purchase of all Series 2008 Bonds tendered on any Purchase Date or Mandatory Purchase Date, either as a result
of an Immediate Termination Date or a Liquidity Facility Event of Default or Credit Facility Event of Default (each,
a "Failed Purchase Date"), no purchase shall be consummated and the Tender Agent shall (1) return all tendered
Series 2008 Bonds to the Holders thereof, (2) return all moneys deposited with the Tender Agent for such purchase
to the Persons providing such moneys and (3) shall immediately notify the Trustee of such occurrence and cause the
Trustee to notify all Owners of the Series 2008 Bonds affected thereby of such occurrence and the reasons therefor
within three Business Days following such occurrence. Upon such occurrence, the County, at the direction of the
A-13
Corporation, shall pursue such curative action with reasonable diligence as shall be necessary to effect the purchase
or cause the purchase of all of the Series 2008 Bonds, either by providing for the delivery of Substitute Liquidity
Facility or Substitute Credit Facility in accordance with the Series Resolution or by converting to the Auction Mode
or the Fixed Rate Mode in accordance with the Series Resolution. All Series 2008 Bonds (other than Bank Bonds)
shall bear interest at the Maximum Rate from the Failed Purchase Date to the date the County purchases or causes
the purchase of all Series 2008 Bonds; provided, however, that notwithstanding the foregoing, the County shall be
obligated to pay the Purchase Price for the 2008 Bonds on the 90~' day after failure to pay the Purchase Price of such
Series 2008 Bonds tendered or deemed tendered for purchase unless the Corporation or the County have (A) caused
the Series 2008 Bonds to be converted to the Auction Mode or the Fixed Rate Mode or (B) delivered to the Tender
Agent a Liquidity Facility or a Substitute Liquidity Facility or delivered to the Trustee a Credit Facility or a
Substitute Credit Facility and thereby have caused all Series 2008 Bonds to be purchased. In the event that the
County purchases or causes the purchase of the Series 2008 Bonds as provided above, the Series 2008 Bonds shall
thereafter bear interest at a Daily Rate, a Weekly Rate, an Auction Period Rate, a Term Rate or a Fixed Rate, as
determined by the County, at the direction of the Corporation. In any event, any right to optionally tender Eligible
Bonds shall remain suspended until a Substitute Liquidity Facility or Substitute Credit Facility has been delivered to
the Tender Agent or until such Series 2008 Bonds have been converted to the Auction Mode or the Fixed Rate
Mode.
Delivery of Series 2008 Bonds by Tendering Bondholders; Undelivered Series 2008 Bonds Deemed
Purchased. All Series 2008 Bonds to be purchased on any date shall be required to be delivered to the principal
office of the Tender Agent at or before 12:00 Noon New York City time on such Purchase Date or Mandatory
Purchase Date. If the Holder of any Series 2008 Bond (or portion thereof) that is subject to purchase pursuant to the
Series Resolution fails to deliver such Series 2008 Bond to the Tender Agent for purchase on the Purchase Date or
Mandatory Purchase Date, and if the Tender Agent is in receipt of the Purchase Price therefor, such Series 2008
Bond (or portion thereofl shall nevertheless be deemed tendered and purchased on the day fixed for purchase thereof
and ownership of such Series 2008 Bond (or portion thereof) shall be transferred to the purchaser thereof as
provided in the following paragraph. Any Holder who fails to deliver such Series 2008 Bond for purchase shall
have no further rights thereunder except the right to receive the Purchase Price thereof upon presentation and
surrender of said Series 2008 Bond to the Tender Agent; provided, however, that any moneys which shall be so held
by the Tender Agent and then remain unclaimed by the Holder for a period of five (5) years after the date on which
such Series 2008 Bond has become payable will be treated as abandoned property pursuant to the provisions of
Section 116B-53 of the General Statutes of North Carolina, and the Tender Agent shall report and remit such
moneys to the Escheat Fund in accordance with Article 1 of Chapter 116B of the General Statutes of North Carolina,
and thereafter the Holder shall only look to the Escheat Fund for payment and then only to the extent of the amounts
so received, without any interest thereon, and the Tender Agent, the Trustee, the Paying Agent, the Registrar, the
Corporation and the County shall have no responsibility with respect to such moneys.
Delivery of Series 2008 Bonds to Purchasers. As long as the Series 2008 Bonds are held under the book-
entry-only system of Securities Depository, all tenders and deliveries of Series 2008 Bonds will be accomplished
under the procedures of the Securities Depository. Otherwise, on the Purchase Date or Mandatory Purchase Date,
the Tender Agent shall direct the Trustee to execute and deliver all Series 2008 Bonds purchased on any Purchase
Date or Mandatory Purchase Date as follows: (1) Series 2008 Bonds purchased and remarketed by the Remarketing
Agent shall be registered and made available to the Remarketing Agent by 2:30 p.m. New York City time in
accordance with the instructions of the Remarketing Agent; (2) Series 2008 Bonds purchased with amounts paid by
or on behalf of the Liquidity Facility Provider or the Credit Facility Provider shall be registered and made available
in the name of or as directed in writing by the Liquidity Facility Provider or the Credit Facility Provider on or before
2:30 p.m. New York City time and become Bank Bonds; and (3) Series 2008 Bonds purchased with amounts paid by
or on behalf of the Corporation shall be registered and made available in the name of or as directed in writing by the
Corporation on or before 2:30 p.m. New York City time. Notwithstanding the foregoing, the Tender Agent shall not
deliver any such Series 2008 Bonds unless it has received written notice from the Liquidity Provider or the Credit
Facility Provider that the amount available for the purchase of Series 2008 Bonds (prior to a conversion of all Series
2008 Bonds to Auction Period Rate or Fixed Rate) is at least equal to the aggregate amount of all Series 2008
Bonds.
No Purchases or Sales in Certain Circumstances. Anything in the Series Resolution to the contrary
notwithstanding, if (i) there shall have occurred and be continuing an Event of Default as described in the Bond
A-14
Order, or (ii) any conditions set forth in the Remarketing Agreement to the performance of the Remarketing Agent's
obligation thereunder to remarket tendered Series 2008 Bonds shall not have been satisfied, then the Remarketing
Agent shall not remarket any Series 2008 Bonds.
The Bond Order provides for the issuance from time to time under the conditions, limitations and
restrictions therein set forth of additional Indebtedness, including Indebtedness secured ~ passu with the Series
2008 Bonds as to the pledge, charge and lien upon the Net Revenues.
The registered owner of this Bond shall have no right to enforce the provisions of the Bond Order or the
Series Resolution, or to institute action to enforce the covenants therein, or to take any action with respect to any
event of default under the Bond Order or the Series Resolution, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Bond Order or the Series Resolution; provided, however,
that any registered owner may institute action to enforce the payment of the principal of or the interest on this Bond.
Upon the occurrence of certain events, and on the conditions, in the manner and with the effect set forth in
the Bond Order, the principal of all Series 2008 Bonds then Outstanding under the Bond Order may become or may
be declared due and payable before the respective stated maturities thereof, together with the interest accrued
thereon.
Modifications or alterations of the Bond Order or any bond order supplemental thereto, or the Series
Resolution or any series resolution supplemental thereto, may be made only to the extent and in the circumstances
permitted by the Bond Order and the Series Resolution.
This Bond, notwithstanding the provisions for registration of transfer stated herein and contained in the
Bond Order and the Series Resolution, at all times shall be and shall be understood to be an investment security
within the meaning of and for all the purposes of Article 8 of the Uniform Commercial Code of North Carolina.
This Bond is issued with the intent that the laws of the State of North Carolina shall govern its construction.
All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance
of this Bond and the adoption of the Bond Order and the Series Resolution have happened, exist and have been
perforned as so required.
Neither the members or officers of the County nor any person executing this Bond is liable personally
hereon or subject to any personal liability or accountability by reason of the issuance thereof
This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security
under the Bond Order or the Series Resolution until it shall have been authenticated by the execution by the Trustee
of the certificate of authentication endorsed hereon.
A-15
IN WITNESS WHEREOF, the County of New Hanover has caused this Bond to be executed
by the manual signatures of the Chairman of its Board of Commissioners and the Clerk to said
Board and its official seal to be impressed hereon all as of the 20th day of October, 2008.
~w~-
0
~~
NTY•~U~
.r, \'Q~
COUNTY OF NE NOVER
By:
Chairman of the Board of Commissioners
By:
Clerk to the Board of Commissioners
A-21
IN WITNESS WHEREOF, the County of New Hanover, North Carolina has caused this Bond to be executed
by the manual signatures of the Chairman of its Board of Commissioners and the Clerk to said Board and its official
seal to be impressed hereon all as of the [ ]day of October, 2008.
COUNTY OF NEW HANOVER, NORTH CAROLINA
By:
Chairman of the Board of Commissioners
By:
Clerk to the Board of Commissioners
(SEAL)
A-16
CERTIFICATE OF AUTHENTICATION
Date of Authentication: October , 2008
This Bond is one of the Series 2008A Bonds designated and described in the provisions
of the within-mentioned Bond Order and Series Resolution.
FIRST-CITIZENS BANK & TRUST
COMPANY, Trustee
By:
Authorized Signatory
CERTIFICATE OF LOCAL GOVERNMENT COMMISSION
The issuance of the within-mentioned Series 2008 Bond has been approved under the
provisions of The State and Local Government Revenue Bond Act of North Carolina, as
amended.
LOCAL GOVERNMENT COMMISSION OF NORTH
CAROLINA
By:
Secretary
A-17
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
and
[Please Print or Typewrite Name and Address of Transferee] the within-mentioned Bond
all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within-mentioned
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
NOTICE: The signature on the Assignment must correspond with the name as it appears upon the
face of the within-mentioned Bond in every particular, without alteration or enlargement or any
change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an institution that is a participant in the Securities
Transfer Medallion Program (STAMP) or a similar program.
A-18
TABLE OF CONTENTS
Page
ARTICLE I Definitions ..................................................................................... B-1
ARTICLE II Auction Procedures ..................................................................... .. B-8
Section 2.01 Orders by Existing Owners and Potential Owners ...................... .. B-8
Section 2.02 Submission of Orders by Broker-Dealers to Auction Agent ...... B-11
Section 2.03 Treatment of Orders by the Auction Agent ................................. B-13
Section 2.04 Determination of Auction Period Rate ........................................ B-15
Section 2.05 Allocation of Bonds .................................................................... B-17
Section 2.06 Notice of Auction Period Rate .................................................... B-19
Section 2.07 Index ............................................................................................ B-20
Section 2.08 Miscellaneous Provisions Regarding Auctions ........................... B-21
Section 2.09 Changes in Auction Period or Auction date ................................ B-22
Both the Definitions in Article I and the Auction Procedures in Article II are subject to modification or
amendment pursuant to Schedule L In the event of any conflict between Article I or Article II and Schedule I,
Schedule I shall prevail. Any reference herein to "Series" such as "a Series of Bonds" or "Bonds of a Series"
shall not apply if there is only one Series of Bonds.
ARTICLE I
Definitions
The following words and terms as used in this Exhibit B (hereinafter "this Exhibit") and elsewhere in
the Authorizing Document have the following meanings with respect to Bonds in an ARS Rate Period unless the
context or use indicates another or different meaning or intent or the definition has been changed, modified or
expanded in Schedule I:
"Agent Member" means a member of, or participant in, the Securities Depository who shall act on
behalf of a Bidder.
"All Hold Rate" has the meaning set forth in Schedule I.
"ARS Conversion Date" means with respect to Bonds, the date on which the Bonds of such Series
convert from an interest rate period other than an ARS Rate Period and begin to bear interest at the Auction
Period Rate.
"ARS Rate Period" means, for each Series of Bonds, any period of time commencing on the day
following the Initial Period and ending on the earlier of the Conversion Date or the day preceding the fmal
maturity date of such Bonds.
"Auction" means each periodic implementation of the Auction Procedures.
"Auction Agent" means the Person appointed as Auction Agent in accordance with the Auction
Agreement. The Auction Agent shall initially be the party named in Schedule I.
"Auction Agreement" means an agreement between the Auction Agent and the Trustee pursuant to
which the Auction Agent agrees to follow the procedures specified in this Exhibit with respect to the Bonds
while such Bonds bear interest at the Auction Period Rate, as such agreement may from time to time be amended
or supplemented.
"Auction Date" means with respect to any Series of Bonds:
(a) Daily Auction Period. If the Bonds are in a daily Auction Period, each Business Day unless such
day is the Business Day prior to the conversion from a daily Auction Period to another Auction Period,
(b) Flexible Auction Period. If the Bonds are in a Flexible Auction Period, the last Business Day of the
Flexible Auction Period, and
(c) Other Auction Periods. If the Bonds are in any other Auction Period, the Business Day next
preceding each Interest Payment Date for such Bonds (whether or not an Auction shall be conducted on such
date);
provided, however, that the last Auction Date with respect to the Bonds in an Auction Period other than a daily
Auction Period or Flexible Auction Period shall be the earlier of (i) the Business Day next preceding the Interest
Payment Date next preceding the Conversion Date for the Bonds and (ii) the Business Day next preceding the
Interest Payment Date next preceding the final maturity date for the Bonds; and
B-1
provided, further, that if the Bonds are in a daily Auction Period, the last Auction Date shall be the earlier of
(x) the second Business Day next preceding the Conversion Date for the Bonds and (y) the Business Day next
preceding the final maturity date for the Bonds. 'The last Business Day of a Flexible Auction Period shall be the
Auction Date for the Auction Period which begins on the next succeeding Business Day, if any. On the second
Business Day preceding the conversion from a daily Auction Period to another Auction Period, there shall be an
Auction for the last daily Auction Period. On the Business Day preceding the conversion from a daily Auction
Period to another Auction Period, there shall be one Auction for the first Auction Period following the
conversion.
The first Auction Date for each Series of Bonds is set forth in Schedule I.
"Auction Desk" means the business unit of aBroker-Dealer that fulfills the responsibilities of the
Broker-Dealer under aBroker-Dealer Agreement, including soliciting Bids for the Bonds, and units of the
Broker-Dealer which are not separated from such business unit by information controls appropriate to control,
limit and monitor the inappropriate dissemination and use of information about Bids.
"Auction Period" means with respect to each Series of Bonds:
(a) Flexible Auction Period. A Flexible Auction Period;
(b) Daily Auction Period. With respect to a Series of Bonds in a daily Auction Period, a period
beginning on each Business Day and extending to but not including the next succeeding Business Day unless
such Business Day is the second Business Day preceding the conversion from a daily Auction Period to another
Auction Period, in which case the daily Auction Period shall extend to, but not include, the next Interest Payment
Date;
(c) Seven day Auction Period. With respect to a Series of Bonds in a seven-day Auction Period,
if Auctions generally are conducted on the day of the week specified in column A of the table below, a period of
generally seven days beginning on the day of the week specified in column B of the table below (or the day
following the last day of the prior Auction Period if the prior Auction Period does not end on the day of the week
specified in column C of the table below) and ending on the day of the week specified in column C of the table
below in the next succeeding week (unless such day is not followed by a Business Day, in which case on the
next succeeding day which is followed by a Business Day):
(A B) (C)
When Auctions Occur
on this da Auction Period Generally
Be ins this da Auction Period Generally
Ends this da
Frida Monda Sunda
Monda Tuesda Monda
Tuesda Wednesda Tuesda
Wednesda Thursda Wednesda
Thursda Frida Thursda
(d) 28-day Auction Period. With respect to a Series of Bonds in a 28-day Auction Period, if Auctions
generally are conducted on the day of the week specified in column A of the table above, a period of generally
28 days beginning on the day of the week specified in column B of the table above (or the day following the last
day of the prior Auction Period if the prior Auction Period does not end on the day of the week specified in
column C of the table above) and ending on the same day of the week specified in column C of the table above
four weeks later (unless such day is not followed by a Business Day, in which case on the next succeeding day
which is followed by a Business Day).
(e) 35-day Auction Period. With respect to a Series of Bonds in a 35-day Auction Period, if Auctions
generally are conducted on the day of the week specified in column A of the table above, a period of generally
35 days beginning on the day of the week specified in column B of the table above (or the day following the last
B-2
day of the prior Auction Period if the prior Auction Period does not end on the day of the week specified in
column C of the table above) and ending on the day of the week specified in column C of the table above five
weeks later (unless such day is not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day).
(f) Three-month Auction Period. With respect to a Series of Bonds in a three-month Auction
Period, a period of generally three months (or shorter period upon a conversion from another Auction Period or
following an ARS Conversion Date) beginning on the day following the last day of the prior Auction Period and
ending on the calendar day immediately preceding the first Business Day of the month that is the third calendar
month following the beginning date of such Auction Period; and
(g) Six-month Auction Period. With respect to a Series of Bonds in a six-month Auction Period, a
period of generally six months (or shorter period upon a conversion from another Auction Period or following an
ARS Conversion Date) beginning on the day following the last day of the prior Auction Period and ending on the
next succeeding date set forth in Schedule I;
Provided, however, that if there is a conversion of a Series of Bonds with Auctions generally conducted
on the day of the week specified in column A of the table above, (i) from a daily Auction Period to a seven-day
Auction Period, the next Auction Period shall begin on the date of the conversion (i.e. the Interest Payment Date
for the prior Auction Period) and shall end on the next succeeding day of the week specified in column C of the
table above (unless such day is not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day), (ii) from a daily Auction Period to a 28-day Auction Period, the next Auction
Period shall begin on the date of the conversion (i.e., the Interest Payment Date for the prior Auction Period) and
shall end of the day of the week specified in column C of the table above (unless such day is not followed by a
Business Day, in which case on the next succeeding day which is followed by a Business Day) which is more
than 21 days but not more than 28 days from such date of conversion, and (iii) from a daily Auction Period to a
35-day Auction Period, the next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the day of the week specified in column C of the
table above (unless such day is not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day) which is more than 28 days but no more than 35 days from such date of
conversion.
Notwithstanding the foregoing, if an Auction is for an Auction Period of more than seven days and the
Auction Rate on such Auction Date is the Maximum Rate as the result of a lack of Sufficient Clearing Bids, the
Auction Period shall automatically convert to a seven-day Auction Period. On the following Auction Date, the
Auction shall be conducted for an Auction Period of the same length as the Auction Period prior to such
automatic conversion. If such Auction is successful, the Auction Period shall revert to the length prior to the
automatic conversion, and, if such Auction is not successful, the Auction Period shall be another seven-day
period.
"Auction Period Rate" means the Auction Rate or any other rate of interest to be borne by the Bonds
during each Auction Period determined in accordance with Section 2.04 of this Exhibit; provided, however, in no
event may the Auction Period Rate exceed the Maximum Rate.
"Auction Procedures" means the procedures for conducting Auctions for Bonds during an ARS Rate
Period set forth in this Exhibit.
"Auction Rate" means for each Series of Bonds for each Auction Period, (i) if Sufficient Clearing Bids
exist, the Winning Bid Rate, provided, however, if all of the Bonds are the subject of Submitted Hold Orders, the
All Hold Rate for such Series of Bonds and (ii) if Sufficient Clearing Bids do not exist, the Maximum Rate for
such Series of Bonds.
"Authorized Denomination" means $25,000, or such other amount specified in Schedule I, and
integral multiples thereof so long as the Bonds bear interest at the Auction Period Rate, notwithstanding anything
else in the Authorizing Document to the contrary.
B-3
"Authorizing Document" has the meaning set forth in Schedule I.
"Available Bonds" means, for each Series of Bonds on each Auction Date, the number of Units of
Bonds that are not the subject of Submitted Hold Orders.
"Bid" has the meaning specified in subsection (a) of Section 2.01 of this Exhibit.
"Bidder" means each Existing Owner and Potential Owner who places an Order.
"Bonds" has the meaning set forth in Schedule I.
"Broker-Dealer" means any entity that is permitted by law to perform the function required of a
Broker-Dealer described in this Exhibit, that is a member of, or a direct participant in, the Securities Depository,
that has been selected by the Corporation and that is a party to aBroker-Dealer Agreement with the Auction
Agent and the Corporation. The "Broker-Dealer of record" with respect to any Bond is the Broker-Dealer which
placed the Order for such Bond or whom the Existing Owner of such Bond has designated as its Broker-Dealer
with respect to such Bond, in each case as reflected in the records of the Auction Agent. The Broker-Dealer(s)
shall initially be the party(ies) named in Schedule I.
"Broker-Dealer Agreement" means an agreement among the Auction Agent, the Corporation and a
Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the procedures described in this Exhibit,
as such agreement may from to time be amended or supplemented.
"Broker-Dealer Deadline" means, with respect to an Order, the internal deadline established by the
Broker-Dealer through which the Order was placed after which it will not accept Orders or any change in any
Order previously placed with such Broker-Dealer; provided, however, that nothing shall prevent the Broker-
Dealer from correcting Clerical Errors by the Broker-Dealer with respect to Orders from Bidders after the
Broker-Dealer Deadline pursuant to the provisions herein. Any Broker-Dealer may change the time or times of
its Broker-Dealer Deadline as it relates to such Broker-Dealer by giving notice not less than two Business Days
prior to the date such change is to take effect to Bidders who place Orders through such Broker-Dealer.
"Business Day" in addition to any other definition of "Business Day" included in the Authorizing
Document, while Bonds bear interest at the Auction Period Rate, the term Business Day shall not include
Saturdays, Sundays, days on which the New York Stock Exchange or its successor is not open for business, days
on which the Federal Reserve Bank of New York is not open for business, days on which banking institutions or
trust companies located in the state in which the operations of the Auction Agent are conducted are authorized or
required to be closed by law, regulation or executive order of the state in which the Auction Agent conducts
operations with respect to the Bonds.
"Clerical Error" means a clerical error in the processing of an Order, and includes, but is not limited
to, the following: (i) a transmission error, including but not limited to, an Order sent to the wrong address or
number, failure to transmit certain pages or illegible transmission, (ii) failure to transmit an Order received from
one or more Existing Owners or Potential Owners (including Orders from the Broker-Dealer which were not
originated by the Auction Desk) prior to the Broker-Dealer Deadline or generated by the Broker-Dealer's
Auction Desk for its own account prior to the Submission Deadline or (iii) a typographical error. Determining
whether an error is a "Clerical Error" is within the reasonable judgment of the Broker-Dealer, provided that the
Broker-Dealer has a record of the correct Order that shows it was so received or so generated prior to the Broker-
Dealer Deadline or the Submission Deadline, as applicable.
"Conversion Date" means the date on which any Series of the Bonds begin to bear interest at a rate
which is determined other than by means of the Auction Procedures.
"Corporation" has the meaning set forth in Schedule I.
B-4
"Electronic Means" means, facsimile transmission, email transmission or other similar electronic
means of communication providing evidence of transmission, including a telephone communication confirmed
by any other method set forth in this definition.
"Error Correction Deadline" means one hour after the Auction Agent completes the dissemination of
the results of the Auction to Broker-Dealers without regard to the time of receipt of such results by any Broker-
Dealer; provided, however, in no event shall the Error Correction Deadline extend past 4:00 p.m., New York
City time, unless the Auction Agent experiences technological failure or force majeure in disseminating the
Auction results which causes a delay in dissemination past 3:00 p.m., New York City time.
"Existing Owner" means a Person who is the beneficial owner of Bonds; provided, however, that for
purposes of conducting an Auction, the Auction Agent may consider aBroker-Dealer acting on behalf of its
customer as an Existing Owner.
"Flexible Auction Period" means with respect to a Series of Bonds,
(a) any period of 182 days or less which is divisible by seven and which begins on an Interest Payment
Date and ends (i) in the case of a Series of Bonds with Auctions generally conducted on Fridays, on a Sunday
unless such Sunday is not followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day, (ii) in the case of a Series of Bonds with Auctions generally conducted on
Mondays, on a Monday unless such Monday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day, (iii) in the case of a Series of Bonds with Auctions
generally conducted on Tuesdays, on a Tuesday unless such Tuesday is not followed by a Business Day, in
which case on the next succeeding day which is followed by a Business Day, (iv) in the case of a Series of Bonds
with Auctions generally conducted on Wednesdays, on a Wednesday unless such Wednesday is not followed by
a Business Day, in which case on the next succeeding day which is followed by a Business Day, and (v) in the
case of a Series of Bonds with Auctions generally conducted on Thursdays, on a Thursday unless such Thursday
is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business
Day or
(b) any period which is longer than 182 days which begins on an Interest Payment Date and ends not
later than the fmal scheduled maturity date of such Series of Bonds.
"Hold Order" means an Order to hold the Bonds as provided in Section 2.01(a) of this Exhibit or such
an Order deemed to have been submitted as provided in Section 2.01(c) of this Exhibit.
"Index" has the meaning set forth in Schedule I.
"Initial Period" has the meaning set forth in Schedule I.
"Initial Period Rate" has the meaning set forth in Schedule I.
"Interest Payment Date" with respect to Bonds of a Series bearing interest at Auction Period Rates,
means, notwithstanding anything else in the Authorizing Document to the contrary, the first Interest Payment
Date for such Series of Bonds as set forth in Schedule I and thereafter (unless changed by Schedule I) (a) when
used with respect to any Auction Period other than a daily Auction Period or a Flexible Auction Period, the
Business Day immediately following such Auction Period, (b) when used with respect to a daily Auction Period,
the first Business Day of the month immediately succeeding the first day of such Auction Period, (c) when used
with respect to a Flexible Auction Period of (i) seven or more but fewer than 183 days, the Business Day
immediately following such Flexible Auction Period, or (ii) 183 or more days, each semiannual date on which
interest on the Bonds would be payable if such Bonds bore interest at a fixed rate of interest and on the Business
Day immediately following such Flexible Auction Period, and (d) the date when the final payment of principal
of the Bonds of such Series becomes due and payable (whether at stated maturity, upon redemption or
acceleration, or otherwise).
B-5
"Issuer" has the meaning set forth in Schedule I.
"Maximum Rate" has the meaning set forth in Schedule I.
"Order" means a Hold Order, Bid or Sell Order.
"Person" has the meaning set forth in Schedule I.
"Potential Owner" means any Person, including any Existing Owner, who may be interested in
acquiring a beneficial interest in the Bonds in addition to the Bonds currently owned by such Person, if any;
provided, however, that for purposes of conducting an Auction, the Auction Agent may consider aBroker-
Dealer acting on behalf of its customer as a Potential Owner.
"Record Date" means, notwithstanding anything else in the Authorizing Document, while the Bonds
bear interest at the Auction Period Rate, the Business Day immediately preceding an Interest Payment Date.
"Schedule I" means Schedule I to this Exhibit.
"Securities Depository" means, notwithstanding anything else in the Authorizing Document to the
contrary, The Depository Trust Company and its successors and assigns or any other securities depository
selected by the Corporation.
"Sell Order" has the meaning specified in subsection (a) of Section 2.01 of this Exhibit.
"Submission Deadline" means, unless changed by Schedule I, 1:00 p.m., New York City time, on each
Auction Date not in a daily Auction Period and 11:00 a.m., New York City time, on each Auction Date in a daily
Auction Period, or such other time on such date as shall be specified from time to time by the Auction Agent if
directed in writing by the Trustee or the Corporation pursuant to the Auction Agreement as the time by which
Broker-Dealers are required to submit Orders to the Auction Agent. Notwithstanding the foregoing, the Auction
Agent will follow the Securities Industry and Financial Markets Association's Early Market Close
Recommendations for shortened trading days for the bond markets (the "SIFMA Recommendation") unless the
Auction Agent is instructed otherwise in writing by the Trustee or the Corporation. In the event of a SIFMA
Recommendation with respect to an Auction Date, the Submission Deadline will be 11:30 a.m., instead of 1:00
p.m., New York City time.
"Submitted Bid" has the meaning specified in subsection (b) of Section 2.04 of this Exhibit.
"Submitted Hold Order" has the meaning specified in subsection (b) of Section 2.04 of this Exhibit.
"Submitted Order" has the meaning specified in subsection (b) of Section 2.04 of this Exhibit.
"Submitted Sell Order" has the meaning specified in subsection (b) of Section 2.04 of this Exhibit.
"Sufficient Clearing Bids" means for each Series of Bonds, an Auction for which the number of Units
of such Bonds that are the subject of Submitted Bids by Potential Owners specifying one or more rates not
higher than the Maximum Rate is not less than the number of Units of such Bonds that are the subject of
Submitted Sell Orders and of Submitted Bids by Existing Owners specifying rates higher than the Maximum
Rate.
"Units" has the meaning set forth in Section 2.02(a)(iii) of this Exhibit.
"Winning Bid Rate" means for each Series of Bonds, the lowest rate specified in any Submitted Bid of
such Series which if calculated by the Auction Agent as the Auction Rate would cause the number of Units of
such Bonds that are the subject of Submitted Bids specifying a rate not greater than such rate to be not less than
the number of Units of Available Bonds of such Series.
B-6
ARTICLE II
Auction Procedures
Section 2.01. Orders by Existing Owners and Potential Owners. (a) Prior to the Broker-Dealer
Deadline for each Series of Bonds on each Auction Date:
(1) each Existing Owner may submit to aBroker-Dealer, in writing or by such other
method as shall be reasonably acceptable to such Broker-Dealer, one or more Orders as to:
(A) the principal amount of Bonds, if any, held by such Existing Owner which such
Existing Owner commits to continue to hold for the next succeeding Auction Period without regard to
the Auction Rate for such Auction Period,
(B) the principal amount of Bonds, if any, held by such Existing Owner which such
Existing Owner commits to continue to hold for the next succeeding Auction Period if the Auction Rate
for the next succeeding Auction Period is not less than the rate per annum specified in such Order (and
if the Auction Rate is less than such specified rate, the effect of the Order shall be as set forth in
paragraph (b)(i)(A) of this Section), and/or
(C) the principal amount of Bonds, if any, held by such Existing Owner which such
Existing Owner offers to sell on the first Business Day of the next succeeding Auction Period (or on the
same day in the case of a daily Auction Period) without regard to the Auction Rate for the next
succeeding Auction Period; and
(ii) each Potential Owner may submit to aBroker-Dealer, in writing or by such other
method as shall be reasonably acceptable to such Broker-Dealer, an Order as to the principal amount of
Bonds, which each such Potential Owner offers to purchase if the Auction Rate for the next succeeding
Auction Period is not less than the rate per annum then specified by such Potential Owner.
For the purposes of the Auction Procedures an Order containing the information referred to in clause
(i)(A) above is referred to as a "Hold Order," an Order containing the information referred to in clause (i)(B) or
(ii) above is referred to as a "Bid," and an Order containing the information referred to in clause (i)(C) above is
referred to as a "Sell Order."
No Auction Desk of aBroker-Dealer shall accept as an Order a submission (whether received from an
Existing Owner or a Potential Owner or generated by the Broker-Dealer for its own account) which does not
conforni to the requirements of the Auction Procedures, including, but not limited to, submissions which are not
in Authorized Denominations, specify a rate which contains more than three figures to the right of the decimal
point or specify an amount greater than the amount of Outstanding Bonds. No Auction Desk of aBroker-Dealer
shall accept a Bid or Sell Order which is conditioned on being filled in whole or a Bid which does not specify a
specific interest rate.
(b) (i) A Bid by an Existing Owner shall constitute an offer to sell on the first Business Day
of the next succeeding Auction Period (or the same day in the case of a daily Auction Period):
(A) the principal amount of Bonds specified in such Bid if the Auction Rate for the
next succeeding Auction Period shall be less than the rate specified in such Bid; or
(B) such principal amount or a lesser principal amount of Bonds to be determined as
described in subsection (a)(v) of Section 2.05 hereof if the Auction Rate for the next succeeding
Auction Period shall be equal to such specified rate; or
B-7
(C) a lesser principal amount of Bonds to be determined as described in subsection
(b)(iv) of Section 2.05 hereof if such specified rate shall be higher than the Maximum Rate and
Sufficient Clearing Bids do not exist.
(11) A Sell Order by an Existing Owner shall constitute an offer to sell:
(A) the principal amount of Bonds specified in such Sell Order; or
(B~ such principal amount or a lesser principal amount of Bonds as described in
subsection (b)(iv) of Section 2.05 hereof if Sufficient Clearing Bids do not exist.
(1ii) A Bid by a Potential Owner shall constitute an offer to purchase:
(A~ the principal amount of Bonds specified in such Bid if the Auction Rate for the
next succeeding Auction Period shall be higher than the rate specified therein; or
(B) such principal amount or a lesser principal amount of Bonds as described in
subsection (a)(vi) of Section 2.05 hereof if the Auction Rate for the next succeeding Auction Period
shall be equal to such specified rate.
(C~ Anything herein to the contrary notwithstanding:
(i) If an Order or Orders covering all of the Bonds of a particular Series held by an
Existing Owner is not submitted to the Broker-Dealer of record for such Existing Owner prior to the
Broker-Dealer Deadline, such Broker-Dealer shall deem a Hold Order to have been submitted on behalf
of such Existing Owner covering the principal amount of Bonds held by such Existing Owner and not
subject to Orders submitted to such Broker-Dealer; provided, however, that if there is a conversion from
one Auction Period to a longer Auction Period and Orders have not been submitted to such Broker-
Dealer prior to the Broker-Dealer Deadline covering the aggregate principal amount of Bonds of a
particular Series to be converted held by such Existing Owner, such Broker-Dealer shall deem a Sell
Order to have been submitted on behalf of such Existing Owner covering the principal amount of Bonds
to be converted held by such Existing Owner not subject to Orders submitted to such Broker-Dealer.
(11~ for purposes of any Auction, any Order by any Existing Owner or Potential Owner
shall be revocable until the Broker-Dealer Deadline, and after the Broker-Dealer Deadline, all such
Orders shall be irrevocable, except as provided in Sections 2.02(e)(ii) and 2.02(f); and
(iii) for purposes of any Auction other than during a daily Auction Period, any Bonds sold
or purchased pursuant to subsection (b)(i), (ii) or (iii) above shall be sold or purchased at a price equal
to 100% of the principal amount thereof; provided that, for purposes of any Auction during a daily
Auction Period, such sale or purchase price shall be 100% of the principal amount thereof plus accrued
interest to the date of sale or purchase.
Section 2.02. Submission of Orders by Broker-Dealers to Auction Agent
(a) Each Broker-Dealer shall submit to the Auction Agent in writing, or by such Electronic
Means as shall be reasonably acceptable to the Auction Agent, prior to the Submission Deadline on each Auction
Date for Bonds of a Series, all Orders with respect to Bonds of such Series accepted by such Broker-Dealer in
accordance with Section 2.01 above and specifying with respect to each Order or aggregation of Orders pursuant
to Section 2.02(b) below:
(1~ the name of the Broker-Dealer;
B-8
(ii) the number of Bidders placing Orders, if requested by the Auction Agent;
(ii1) the aggregate number of Units of Bonds of such Series, if any, that are the subject of
such Order, where each Unit is equal to the principal amount of the minimum Authorized
Denomination of the Bonds;
(iv) to the extent that such Bidder is an Existing Owner:
(A) the number of Units of Bonds of such Series, if any, subject to any Hold Order
placed by such Existing Owner;
(B) the number of Units of Bonds of such Series, if any, subject to any Bid placed by
such Existing Owner and the rate specified in such Bid; and
(C) the number of Units of Bonds of such Series, if any, subject to any Sell Order
placed by such Existing Owner; and
(v) to the extent such Bidder is a Potential Owner, the rate specified in such Bid.
(b) If more than one Bid is submitted to aBroker-Dealer on behalf of any single Potential
Owner, the Broker-Dealer shall aggregate each Bid on behalf of such Potential Owner submitted with the same
rate and consider such Bids as a single Bid and shall consider each Bid submitted with a different rate a separate
Bid with the rate and the number of Units of Bonds specified therein.
A Broker-Dealer may aggregate the Orders of different Potential Owners with those of other Potential
Owners on whose behalf the Broker-Dealer is submitting Orders and may aggregate the Orders of different Existing
Owners with other Existing Owners on whose behalf the Broker-Dealer is submitting Orders; provided, however,
Bids may only be aggregated if the interest rates on the Bids are the same.
(C) None of the Issuer, the Corporation, the Trustee or the Auction Agent shall be responsible
for the failure of any Broker-Dealer to submit an Order to the Auction Agent on behalf of any Existing Owner or
Potential Owner.
(d) Nothing contained herein shall preclude aBroker-Dealer from placing an Order for some
or all of the Bonds for its own account.
(e) Until the Submission Deadline, aBroker-Dealer may withdraw or modify any Order
previously submitted to the Auction Agent (i) for any reason if the Order was generated by the Auction Desk of
the Broker-Dealer for the account of the Broker-Dealer or (ii) to correct a Clerical Error on the part of the
Broker-Dealer in the case of any other Order, including Orders from the Broker-Dealer which were not
originated by the Auction Desk.
Dealer may:
(f) After the Submission Deadline and prior to the Error Correction Deadline, a Broker-
(1) submit to the Auction Agent an Order received from an Existing Owner, Potential
Owner or aBroker-Dealer which is not an Order originated by the Auction Desk, in each case prior to
the Broker-Dealer Deadline, or an Order generated by the Broker-Dealer's Auction Desk for its own
account prior to the Submission Deadline (provided that in each case the Broker-Dealer has a record of
such Order and the time when such Order was received or generated) and not submitted to the Auction
Agent prior to the Submission Deadline as a result of (A) an event of force majeure or a technological
failure which made delivery prior to the Submission Deadline impossible or, under the conditions then
prevailing, impracticable or (B) a Clerical Error on the part of the Broker-Dealer; or
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(11) modify or withdraw an Order received from an Existing Owner or Potential Owner or
generated by the Broker-Dealer (whether generated by the Broker-Dealer's Auction Desk or elsewhere
within the Broker-Dealer) for its own account and submitted to the Auction Agent prior to the
Submission Deadline or pursuant to clause (i) above, if the Broker-Dealer determines that such Order
contained a Clerical Error on the part of the Broker-Dealer.
In the event aBroker-Dealer makes a submission, modification or withdrawal pursuant to this
Section 2.02(f) and the Auction Agent has already run the Auction, the Auction Agent shall rerun the Auction,
taking into account such submission, modification or withdrawal. Each submission, modification or withdrawal
of an Order submitted pursuant to this Section 2.02(f) by aBroker-Dealer after the Submission Deadline and
prior to the Error Correction Deadline shall constitute a representation by the Broker-Dealer that (A) in the case
of a newly submitted Order or portion thereof or revised Order, the failure to submit such Order prior to the
Submission Deadline resulted from an event described in clause (i) above and such Order was received from an
Existing Owner or Potential Owner or is an Order received from the Broker-Dealer that was not originated by
the Auction Desk, in each case, prior to the Broker-Dealer Deadline, or generated internally by such Broker-
Dealer's Auction Desk for its own account prior to the Submission Deadline or (B) in the case of a modified or
withdrawn Order, such Order was received from an Existing Owner, a Potential Owner or the Broker-Dealer
which was not originated by the Auction Desk prior to the Broker-Dealer Deadline, or generated internally by
such Broker-Dealer's Auction Desk for its own account prior to the Submission Deadline and such Order as
submitted to the Auction Agent contained a Clerical Error on the part of the Broker-Dealer and that such Order
has been modified or withdrawn solely to effect a correction of such Clerical Error, and in the case of either (A)
or (B), as applicable, the Broker-Dealer has a record of such Order and the time when such Order was received
or generated. The Auction Agent shall be entitled to rely conclusively (and shall have no liability for relying) on
such representation for any and all purposes of the Auction Procedures.
(g) If after the Auction Agent announces the results of an Auction, aBroker-Dealer
becomes aware that an error was made by the Auction Agent, the Broker-Dealer shall communicate such
awareness to the Auction Agent prior to 5:00 p.m. New York City time on the Auction Date (or 2:00 pm. New
York City time in the case of Bonds in a daily Auction Period). If the Auction Agent determines there has been
such an error (as a result of either a communication from aBroker-Dealer or its own discovery) prior to 3:00
p.m. New York City time on the first day of the Auction Period with respect to which such Auction was
conducted, the Auction Agent shall correct the error and notify each Broker-Dealer that submitted Bids or held a
position in Bonds in such Auction of the corrected results.
(h) Nothing contained herein shall preclude the Auction Agent from:
(1) advising aBroker-Dealer prior to the Submission Deadline that it has not received
Sufficient Clearing Bids for the Bonds; provided, however, that if the Auction Agent so advises any
Broker-Dealer, it shall so advise all Broker-Dealers; or
(ii) verifying the Orders of aBroker-Dealer prior to or after the Submission Deadline;
provided, however, that if the Auction Agent verifies the Orders of any Broker-Dealer, it shall verify
the Orders of all Broker-Dealers requesting such verification.
Section 2.03. Treatment of Orders by the Auction Agent. Anything herein to the contrary
notwithstanding:
(a) If the Auction Agent receives an Order which does not conform to the requirements of the
Auction Procedures, the Auction Agent may contact the Broker-Dealer submitting such Order until one hour
after the Submission Deadline and inform such Broker-Dealer that it may resubmit such Order so that it
conforms to the requirements of the Auction Procedures. Upon being so informed, such Broker-Dealer may
correct and resubmit to the Auction Agent any such Order that, solely as a result of a Clerical Error on the part of
such Broker-Dealer, did not conform to the requirements of the Auction Procedures when previously submitted
to the Auction Agent. Any such resubmission by aBroker-Dealer shall constitute a representation by such
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Broker-Dealer that the failure of such Order to have so conformed was solely as a result of a Clerical Error on
the part of such Broker-Dealer. If the Auction Agent has not received a corrected conforming Order within one
hour and fifteen minutes of the Submission Deadline, the Auction Agent shall, if and to the extent applicable,
adjust or apply such Order, as the case may be, in conformity with the provisions of subsections (b), (c) or (d) of
this Section 2.03 and, if the Auction Agent is unable to so adjust or apply such Order, the Auction Agent shall
reject such Order.
(b) If any rate specified in any Bid contains more than three figures to the right of the decimal
point, the Auction Agent shall round such rate up to the next highest one thousandth of one percent (0.001 %).
(C) If one or more Orders covering in the aggregate more than the number of Units of
Outstanding Bonds of a particular Series are submitted by aBroker-Dealer to the Auction Agent, such Orders
shall be considered valid in the following order of priority:
(1) all Hold Orders shall be considered Hold Orders, but only up to and including in the
aggregate the number of Units of Bonds of such Series for which such Broker-Dealer is the Broker-
Dealer of record;
(ii) (A) any Bid of aBroker-Dealer shall be considered valid as a Bid of an Existing
Owner up to and including the excess of the number of Units of Bonds of such Series for which such
Broker-Dealer is the Broker-Dealer of record over the number of Units of the Bonds of such Series
subject to Hold Orders referred to in clause (i) above;
(B) subject to clause (A) above, all Bids of aBroker-Dealer with the same rate shall
be aggregated and considered a single Bid of an Existing Owner up to and including the excess of the
number of Units of Bonds of such Series for which such Broker-Dealer is the Broker-Dealer of record
over the number of Units of Bonds of such Series for which such Broker-Dealer is the Broker-Dealer of
record subject to Hold Orders referred to in clause (i) above;
(C) subject to clause (A) above, if more than one Bid with different rates is submitted
by aBroker-Dealer, such Bids shall be considered Bids of an Existing Owner in the ascending order of
their respective rates up to the amount of the excess of the number of Units of Bonds of such Series for
which such Broker-Dealer is the Broker-Dealer of record over the number of Units of Bonds of such
Series for which such Broker-Dealer is the Broker-Dealer of record subject to Hold Orders referred to
in clause (i) above; and
(D) the number of Units, if any, of such Bonds of such Series subject to Bids not
considered to be Bids for which such Broker-Dealer is the Broker-Dealer of record under this clause (ii)
shall be treated as the subject of a Bid by a Potential Owner;
(1ii) all Sell Orders shall be considered Sell Orders, but only up to and including the
number of Units of Bonds of such Series equal to the excess of the number of Units of Bonds of such
Series for which such Broker-Dealer is the Broker-Dealer of record over the sum of the number of Units
of the Bonds of such Series considered to be subject to Hold Orders pursuant to clause (i) above and the
number of Units of Bonds of such Series considered to be subject to Bids for which such Broker-Dealer
is the Broker-Dealer of record pursuant to clause (ii) above.
(d) If any Order is for other than an integral number of Units, then the Auction Agent shall
round the amount down to the nearest number of whole Units, and the Auction Agent shall conduct the Auction
Procedures as if such Order had been submitted in such number of Units.
(e) For purposes of any Auction other than during a daily Auction Period, if an Auction
Agent has been notified by the Trustee, Issuer or Corporation that any portion of an Order by aBroker-Dealer
relates to a Bond which has been called for redemption on or prior to the Interest Payment Date next succeeding
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such Auction, the Order shall be invalid with respect to such portion and the Auction Agent shall conduct the
Auction Procedures as if such portion of such Order had not been submitted.
(fl For purposes of any Auction other than during a daily Auction Period, no portion of a
Bond which the Auction Agent has been notified by the Trustee, Issuer or Corporation has been called for
redemption on or prior to the Interest Payment Date next succeeding such Auction shall be included in the
calculation of Available Bonds for such Auction.
(g) If an Order or Orders covering all of the Bonds of a particular Series is not submitted by a
Broker-Dealer of record prior to the Submission Deadline, the Auction Agent shall deem a Hold Order to have
been submitted on behalf of such Broker-Dealer covering the number of Units of Bonds for which such Broker-
Dealer is the Broker-Dealer of record and not subject to Orders submitted to the Auction Agent; provided,
however, that if there is a conversion from one Auction Period to a longer Auction Period and Orders have not
been submitted by such Broker-Dealer prior to the Submission Deadline covering the number of Units of Bonds
of a particular Series to be converted for which such Broker-Dealer is the Broker-Dealer of record, the Auction
Agent shall deem a Sell Order to have been submitted on behalf of such Broker-Dealer covering the number of
Units of Bonds to be converted for which such Broker-Dealer is the Broker-Dealer of record not subject to
Orders submitted by such Broker-Dealer.
(h) Any Bid specifying a rate higher than the Maximum Rate will (i) be treated as a Sell Order
if submitted by an Existing Owner and (ii) not be accepted if submitted by a Potential Owner.
Section 2.04. Determination of Auction Period Rate. (a) If requested by the Trustee or a Broker-
Dealer, not later than 10:30 a.m., New York City time (or such other time as may be agreed to by the Auction
Agent and all Broker-Dealers), on each Auction Date for each Series of Bonds, the Auction Agent shall advise
such Broker-Dealer (and thereafter confirm to the Trustee, if requested) of the All Hold Rate, the Index and, if
the Maximum Rate is not a fixed interest rate, the Maximum Rate. Such advice, and confirmation, shall be made
by telephone or other Electronic Means acceptable to the Auction Agent.
(b) Promptly after the Submission Deadline for each Series of Bonds on each Auction Date,
the Auction Agent shall assemble all Orders submitted or deemed submitted to it by the Broker-Dealers (each
such Order as submitted or deemed submitted by aBroker-Dealer being hereinafter referred to as a "Submitted
Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, and collectively as a
"Submitted Order") and shall determine (i) the Available Bonds, (ii) whether there are Sufficient Clearing Bids,
and (iii) the Auction Rate.
(C) In the event the Auction Agent shall fail to calculate or, for any reason, fails to provide the
Auction Rate on the Auction Date, for any Auction Period (i) if the preceding Auction Period was a period of 35
days or less, (A) a new Auction Period shall be established for the same length of time as the preceding Auction
Period, if the failure to make such calculation was because there was not at the time a duly appointed and acting
Auction Agent or Broker-Dealer, and the Auction Period Rate for the new Auction Period shall be the
percentage of the Index set forth in Schedule I under "Determination of Auction Period Rate" if the Index is
ascertainable on such date (by the Auction Agent, if there is at the time an Auction Agent, or the Trustee, if at
the time there is no Auction Agent) or, (B) if the failure to make such calculation was for any other reason or if
the Index is not ascertainable on such date, the prior Auction Period shall be extended to the seventh day
following the day that would have been the last day of the preceding Auction Period (or if such seventh day is
not followed by a Business Day then to the next succeeding day that is followed by a Business Day) and the
Auction Period Rate for the period as so extended shall be the same as the Auction Period Rate for the Auction
Period prior to the extension, and (ii) if the preceding Auction Period was a period of greater than 35 days, (A) a
new Auction Period shall be established for a period that ends on the seventh day following the day that was the
last day of the preceding Auction Period, (or if such seventh day is not followed by a Business Day then to the
next succeeding day which is followed by a Business Day) if the failure to make such calculation was because
there was not at the time a duly appointed and acting Auction Agent or Broker-Dealer, and the Auction Period
Rate for the new Auction Period shall be the percentage of the Index set forth in Schedule I under
"Determination of Auction Period Rate" if the Index is ascertainable on such date (by the Auction Agent, if
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there is at the time an Auction Agent, or the Trustee, if at the time there is no Auction Agent) or, (B) if the
failure to make such calculation was for any other reason or if the Index is not ascertainable on such date, the
prior Auction Period shall be extended to the seventh day following the day that would have been the last day of
the preceding Auction Period (or if such seventh day is not followed by a Business Day then to the next
succeeding day that is followed by a Business Day) and the Auction Period Rate for the period as so extended
shall be the same as the Auction Period Rate for the Auction Period prior to the extension. In the event a new
Auction Period is established as set forth in clause (ii) (A) above, an Auction shall be held on the last Business
Day of the new Auction Period to determine an Auction Rate for an Auction Period beginning on the Business
Day immediately following the last day of the new Auction Period and ending on the date on which the Auction
Period otherwise would have ended had there been no new Auction Period or Auction Periods subsequent to the
last Auction Period for which a Winning Bid Rate or an All Hold Rate had been determined. In the event an
Auction Period is extended as set forth in clause (i) (B) or (ii) (B) above, an Auction shall be held on the last
Business Day of the Auction Period as so extended to determine an Auction Rate for an Auction Period
beginning on the Business Day immediately following the last day of the extended Auction Period and ending on
the date on which the Auction Period otherwise would have ended had there been no extension of the prior
Auction Period.
Notwithstanding the foregoing, neither new nor extended Auction Periods shall total more than
35 days in the aggregate. If at the end of the 35 days the Auction Agent fails to calculate or provide the Auction
Rate, or there is not at the time a duly appointed and acting Auction Agent or Broker-Dealer, the Auction Period
Rate shall be the Maximum Rate.
(d} In the event of a failed conversion from an Auction Period to any other period or in the
event of a failure to change the length of the current Auction Period due to the lack of Sufficient Clearing Bids at
the Auction on the Auction Date for the first new Auction Period, the Auction Period Rate for the next Auction
Period shall be the Maximum Rate and the Auction Period shall be a seven-day Auction Period.
(e} If the Bonds are no longer maintained in book-entry-only form by the Securities
Depository, then the Auctions shall cease and the Auction Period Rate shall be the Maximum Rate.
Section 2.05. Allocation of Bond.
(a) In the event of Sufficient Clearing Bids for a Series of Bonds, subject to the further
provisions of subsections (c) and (d) below, Submitted Orders for each Series of Bonds shall be accepted or
rejected as follows in the following order of priority:
(i} the Submitted Hold Order of each Existing Owner shall be accepted, thus requiring
each such Existing Owner to continue to hold the Bonds that are the subject of such Submitted Hold
Order;
(11} the Submitted Sell Order of each Existing Owner shall be accepted and the Submitted
Bid of each Existing Owner specifying any rate that is higher than the Winning Bid Rate shall be
rejected, thus requiring each such Existing Owner to sell the Bonds that are the subject of such
Submitted Sell Order or Submitted Bid;
(111} the Submitted Bid of each Existing Owner specifying any rate that is lower than the
Winning Bid Rate shall be accepted, thus requiring each such Existing Owner to continue to hold the
Bonds that are the subject of such Submitted Bid;
(lv} the Submitted Bid of each Potential Owner specifying any rate that is lower than the
Winning Bid Rate shall be accepted, thus requiring each such Potential Owner to purchase the Bonds
that are the subject of such Submitted Bid;
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(v) the Submitted Bid of each Existing Owner specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Existing Owner to continue to hold the
Bonds that are the subject of such Submitted Bid, but only up to and including the number of Units of
Bonds obtained by multiplying (A) the aggregate number of Units of Outstanding Bonds which are not
the subject of Submitted Hold Orders described in clause (i) above or of Submitted Bids described in
clauses (iii) or (iv) above by (B) a fraction the numerator of which shall be the number of Units of
Outstanding Bonds held by such Existing Owner subject to such Submitted Bid and the denominator of
which shall be the aggregate number of Units of Outstanding Bonds subject to such Submitted Bids
made by all such Existing Owners that specified a rate equal to the Winning Bid Rate, and the
remainder, if any, of such Submitted Bid shall be rejected, thus requiring each such Existing Owner to
sell any excess amount of Bonds;
(vl) the Submitted Bid of each Potential Owner specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Potential Owner to purchase the Bonds
that are the subject of such Submitted Bid, but only in an amount equal to the number of Units of Bonds
obtained by multiplying (A) the aggregate number of Units of Outstanding Bonds which are not the
subject of Submitted Hold Orders described in clause (i) above or of Submitted Bids described in
clauses (iii), (iv) or (v) above by (B) a fraction the numerator of which shall be the number of Units of
Outstanding Bonds subject to such Submitted Bid and the denominator of which shall be the sum of the
aggregate number of Units of Outstanding Bonds subject to such Submitted Bids made by all such
Potential Owners that specified a rate equal to the Winning Bid Rate, and the remainder of such
Submitted Bid shall be rejected; and
(vii) the Submitted Bid of each Potential Owner specifying any rate that is higher than the
Winning Bid Rate shall be rejected.
(b~ In the event there are not Sufficient Clearing Bids for a Series of Bonds, Submitted Orders
for each Series of Bonds shall be accepted or rejected as follows in the following order of priority:
(1) the Submitted Hold Order of each Existing Owner shall be accepted, thus requiring
each such Existing Owner to continue to hold the Bonds that are the subject of such Submitted Hold
Order;
(11) the Submitted Bid of each Existing Owner specifying any rate that is not higher than
the Maximum Rate shall be accepted, thus requiring each such Existing Owner to continue to hold the
Bonds that are the subject of such Submitted Bid;
(ii1) the Submitted Bid of each Potential Owner specifying any rate that is not higher than
the Maximum Rate shall be accepted, thus requiring each such Potential Owner to purchase the Bonds
that are the subject of such Submitted Bid;
(1v) the Submitted Sell Orders of each Existing Owner shall be accepted as Submitted Sell
Orders and the Submitted Bids of each Existing Owner specifying any rate that is higher than the
Maximum Rate shall be deemed to be and shall be accepted as Submitted Sell Orders, in both cases
only up to and including the number of Units of Bonds obtained by multiplying (A) the aggregate
number of Units of Bonds subject to Submitted Bids described in clause (iii) of this subsection (b) by
(B) a fraction the numerator of which shall be the number of Units of Outstanding Bonds held by such
Existing Owner subject to such Submitted Sell Order or such Submitted Bid deemed to be a Submitted
Sell Order and the denominator of which shall be the number of Units of Outstanding Bonds subject to
all such Submitted Sell Orders and such Submitted Bids deemed to be Submitted Sell Orders, and the
remainder of each such Submitted Sell Order or Submitted Bid shall be deemed to be and shall be
accepted as a Hold Order and each such Existing Owner shall be required to continue to hold such
excess amount of Bonds; and
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(v) the Submitted Bid of each Potential Owner specifying any rate that is higher than the
Maximum Rate shall be rejected.
(C) If, as a result of the undertakings described in Section 2.05(a) or (b) above, any Existing
Owner or Potential Owner would be required to purchase or sell an aggregate principal amount of the Bonds that
is not an integral multiple of an Authorized Denomination on any Auction Date, the Auction Agent shall by lot,
in such manner as it shall determine in its sole discretion, round up or down the principal amount of the Bonds to
be purchased or sold by any Existing Owner or Potential Owner on such Auction Date so that the aggregate
principal amount of the Bonds purchased or sold by each Existing Owner or Potential Owner on such Auction
Date shall be an integral multiple of such Authorized Denomination, even if such allocation results in one or
more of such Existing Owners or Potential Owners not purchasing or selling any Bonds on such Auction Date.
(d) If, as a result of the undertakings described in Section 2.05(a) above, any Potential Owner
would be required to purchase less than an Authorized Denomination in principal amount of the Bonds on any
Auction Date, the Auction Agent shall by lot, in such manner as it shall determine in its sole discretion, allocate
the Bonds for purchase among Potential Owners so that the principal amount of the Bonds purchased on such
Auction Date by any Potential Owner shall be an integral multiple of such Authorized Denomination, even if
such allocation results in one or more of such Potential Owners not purchasing the Bonds on such Auction Date.
Section 2.06. Notice of Auction Period Rate. (a) On each Auction Date, the Auction Agent shall
notify each Broker-Dealer that participated in the Auction held on such Auction Date by Electronic Means
acceptable to the Auction Agent and the applicable Broker-Dealer of the following, with respect to each Series
of Bonds for which an Auction was held on such Auction Date:
(1) the Auction Period Rate determined on such Auction Date for the succeeding Auction
Period;
(1i) whether Sufficient Clearing Bids existed for the determination of the Winning Bid
Rate;
(11i) if such Broker-Dealer submitted a Bid or a Sell Order on behalf of an Existing Owner,
whether such Bid or Sell Order was accepted or rejected and the number of Units of Bonds, if any, to be
sold by such Existing Owner;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential Owner, whether such
Bid was accepted or rejected and the number of Units of Bonds, if any, to be purchased by such
Potential Owner;
(v) if the aggregate number of Units of the Bonds to be sold by all Existing Owners on
whose behalf such Broker-Dealer submitted Bids or Sell Orders is different from the aggregate number
of Units of Bonds to be purchased by all Potential Owners on whose behalf such Broker-Dealer
submitted a Bid, the name or names of one or more Broker-Dealers (and the Agent Member, if any, of
each such other Broker-Dealer) and the number of Units of Bonds to be (A) purchased from one or
more Existing Owners on whose behalf such other Broker-Dealers submitted Bids or Sell Orders or
(B) sold to one or more Potential Owners on whose behalf such Broker-Dealer submitted Bids; and
(vl) the amount of dividend or interest payable per Unit on each Interest Payment Date
with respect to such Auction Period; and
(vll) the immediately succeeding Auction Date.
(b) On each Auction Date, with respect to each Series of Bonds for which an Auction was
held on such Auction Date, each Broker-Dealer that submitted an Order on behalf of any Existing Owner or
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Potential Owner shall: (i) if requested by an Existing Owner or a Potential Owner, advise such Existing Owner
or Potential Owner on whose behalf such Broker-Dealer submitted an Order as to (A) the Auction Period Rate
determined on such Auction Date, (B) whether any Bid or Sell Order submitted on behalf of such Owner was
accepted or rejected and (C) the immediately succeeding Auction Date; (ii) instruct each Potential Owner on
whose behalf such Broker-Dealer submitted a Bid that was accepted, in whole or in part, to instruct such
Potential Owner's Agent Member to pay to such Broker-Dealer (or its Agent Member) through the Securities
Depository the amount necessary to purchase the number of Units of Bonds to be purchased pursuant to such Bid
(including, with respect to the Bonds in a daily Auction Period, accrued interest if the purchase date is not an
Interest Payment Date for such Bond) against receipt of such Bonds; and (iii) instruct each Existing Owner on
whose behalf such Broker-Dealer submitted a Sell Order that was accepted or a Bid that was rejected in whole or
in part, to instruct such Existing Owner's Agent Member to deliver to such Broker-Dealer (or its Agent Member)
through the Securities Depository the number of Units of Bonds to be sold pursuant to such Bid or Sell Order
against payment therefor.
(C) The Auction Agent shall give notice of the Auction Rate to the Corporation, Issuer and
Trustee by mutually acceptable Electronic Means and the Trustee shall promptly give notice of such Auction
Rate to the Securities Depository.
Section 2.07. Index.
(a) If for any reason on any Auction Date the Index shall not be determined as provided in
Schedule I, the Index shall be the Index for the prior Business Day.
(b) The determination of the Index as provided in Schedule I and herein shall be conclusive
and binding upon the Issuer, the Corporation, the Trustee, the Broker-Dealers, the Auction Agent and the
Owners of the Bonds.
Section 2.08. Miscellaneous Provisions Regarding Auctions.
(a) In this Exhibit, each reference to the purchase, sale or holding of Bonds shall refer to
beneficial interests in Bonds, unless the context clearly requires otherwise.
(b~ During an ARS Rate Period with respect to each Series of Bonds, the provisions of the
Authorizing Document and the defmitions contained therein and described in this Exhibit, including without
limitation the definitions of All Hold Rate, Index, Interest Payment Date, Maximum Rate, Auction Period Rate
and Auction Rate, may be amended pursuant to the Authorizing Document by obtaining the consent of the
owners of all affected Outstanding Bonds bearing interest at the Auction Period Rate as follows. If on the first
Auction Date occurring at least 20 days after the date on which the Trustee mailed notice of such proposed
amendment to the registered owners of the affected Outstanding Bonds as required by the Authorizing
Document, (i) the Auction Period Rate which is determined on such date is the Winning Bid Rate or the All Hold
Rate and (ii) there is delivered to the Corporation and the Trustee an opinion of Bond Counsel to the effect that
such amendment shall not adversely affect the validity of the Bonds or any exemption from federal income
taxation to which the interest on the Bonds would otherwise be entitled, the proposed amendment shall be
deemed to have been consented to by the registered owners of all affected Outstanding Bonds bearing interest at
an Auction Period Rate.
(C~ If the Securities Depository notifies the Issuer that it is unwilling or unable to continue as
registered owner of the Bonds or if at any time the Securities Depository shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a
successor to the Securities Depository is not appointed by the Issuer within 90 days after the Issuer receives
notice or becomes aware of such condition, as the case may be, the Auctions shall cease and the Issuer shall
execute and the Trustee shall authenticate and deliver certificates representing the Bonds. Such Bonds shall be
registered in such names and Authorized Denominations as the Securities Depository, pursuant to instructions
from the Agent Members or otherwise, shall instruct the Issuer and the Trustee.
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During an ARS Rate Period, so long as the ownership of the Bonds is maintained in book-
entry form by the Securities Depository, an Existing Owner or a beneficial owner may sell, transfer or otherwise
dispose of a Bond only pursuant to a Bid or Sell Order in accordance with the Auction Procedures or to or
through aBroker-Dealer, provided that (i) in the case of all transfers other than pursuant to Auctions, such
Existing Owner or its Broker-Dealer or its Agent Member advises the Auction Agent of such transfer and (ii) a
sale, transfer or other disposition of Bonds from a customer of aBroker-Dealer who is listed on the records of
that Broker-Dealer as the holder of such Bonds to that Broker-Dealer or another customer of that Broker-Dealer
shall not be deemed to be a sale, transfer or other disposition for purposes of this paragraph if such Broker-
Dealer remains the Existing Owner of the Bonds so sold, transferred or disposed of immediately after such sale,
transfer or disposition.
(d) Unless specifically provided otherwise in Schedule I, the Auction Agent shall continue to
implement the Auction Procedures notwithstanding the occurrence of an Event of Default under the Authorizing
Document.
Section 2.09. Changes in Auction Period or Auction Date.
(a) Changes in Auction Period.
(1) During any ARS Rate Period, the Corporation, may, from time to time on the Interest
Payment Date immediately following the end of any Auction Period, change the length of the Auction
Period with respect to all of the Bonds of a Series among daily, seven-days, 28-days, 35-days, three
months, six months or a Flexible Auction Period in order to accommodate economic and financial
factors that may affect or be relevant to the length of the Auction Period and the interest rate borne by
such Bonds. The Corporation shall initiate the change in the length of the Auction Period by giving
written notice to the Issuer, the Trustee, the Auction Agent, the Broker-Dealers and the Securities
Depository that the Auction Period shall change if the conditions described herein are satisfied and the
proposed effective date of the change, at least 10 Business Days prior to the Auction Date for such
Auction Period.
(11) Any such changed Auction Period shall be for a period of one day, seven-days, 28-
days, 35-days, three months, six months or a Flexible Auction Period and shall be for all of the Bonds
of such Series.
(iii) The change in length of the Auction Period shall take effect only if Sufficient
Clearing Bids exist at the Auction on the Auction Date for such new Auction Period. For purposes of
the Auction for such new Auction Period only, except to the extent any Existing Owner submits an
Order with respect to such Bonds of any Series, each Existing Owner shall be deemed to have
submitted Sell Orders with respect to all of its Bonds of such Series if the change is to a longer Auction
Period and a Hold Order if the change is to a shorter Auction Period. If there are not Sufficient
Clearing Bids for the first Auction Period, the Auction Rate for the new Auction Period shall be the
Maximum Rate, and the Auction Period shall be a seven-day Auction Period.
(b~ Changes in Auction Date. During any ARS Rate Period, the Auction Agent, at the
direction of the Corporation, may specify an earlier or later Auction Date (but in no event more than five
Business Days earlier or later) than the Auction Date that would otherwise be determined in accordance with the
definition of "Auction Date" in order to conform with then current market practice with respect to similar
securities or to accommodate economic and financial factors that may affect or be relevant to the day of the week
constituting an Auction Date and the interest rate borne by the Bonds. The Auction Agent shall provide notice
of the Corporation's direction to specify an earlier Auction Date for an Auction Period by means of a written
notice delivered at least 45 days prior to the proposed changed Auction Date to the Trustee, the Issuer, the
Corporation and the Broker-Dealers with a copy to the Securities Depository. In the event the Auction Agent is
instructed to specify an earlier or later Auction Date, the days of the week on which an Auction Period begins
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and ends, the day of the week on which an Auction Period ends and the Interest Payment Dates relating to a such
Auction Period shall be adjusted accordingly.
(C) Changes Resulting from Unscheduled Holidays. If, in the opinion of the Auction Agent
and the Broker-Dealers, there is insufficient notice of an unscheduled holiday to allow the efficient
implementation of the Auction Procedures set forth herein, the Auction Agent and the Broker-Dealers may, as
they deem appropriate, set a different Auction Date and adjust any Interest Payment Dates and Auction Periods
affected by such unscheduled holiday. In the event there is not agreement among the Broker-Dealers, the
Auction Agent shall set the different Auction Date and make such adjustments as directed by the Broker-Dealer
for a majority of the outstanding Units (based on the number of Units for which aBroker-Dealer is listed as the
Broker-Dealer in the Existing Owner Registry maintained by the Auction Agent pursuant to Section 2.2(a) of the
Auction Agreement), and, if there is not a majority so directing, the Auction Date shall be moved to the next
succeeding Business Day following the scheduled Auction Date, and the Interest Payment Date and the Auction
Period shall be adjusted accordingly.
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SCHEDULEI
to
AUCTION PROCEDURES
In the event of any conflict between this Schedule I and Exhibit B, this Schedule I shall prevail.
Definitions
"All Hold Rate" means, as of any Auction Date, 65% of the Index in effect on such Auction Date for any
Bond the interest on which is not includable in gross income of the beneficial owner of such Bond for federal
income tax purposes.
"Auction Agent" shall initially be the auction agent appointed pursuant to Section 210(A)(3)(d) of the
Authorizing Document.
"Auction Date" shall include as part of the defmition the first Auction Date which shall be set on an ARS
Conversion Date.
"Auction Period" shall include in the Six-month Auction Period either March 31 or September 30.
"Authorized Denomination" means $25,000 unless another amount is specified here.
"Authorizing Document" means the Series Resolution adopted by the Board of Commissioners of the
County of New Hanover, North Carolina on October 20, 2008.
"Bonds" means the Series 2008A Bonds and Series 2008B Bonds (as defined in the Authorizing Document).
"Broker-Dealer" shall initially be the broker-dealer appointed pursuant to Section 210(A)(3)(d) of the
Authorizing Document.
"Corporation" means New Hanover Regional Medical Center.
"Index" means on any Auction Date with respect to Bonds in any Auction Period of 35 days or less, as
provided by the Broker-Dealer. The Index with respect to Bonds in any Auction Period of more than 35 days shall be
the rate on United States Treasury Securities having a maturity which most closely approximates the length of the
Auction Period as last published in The Wall Street Journal or such other source as may be mutually agreed upon by
the Trustee or Issuer, as applicable, and the Broker-Dealers. If either rate is unavailable, the Index shall be an index or
rate agreed to by all Broker-Dealers and consented to by the Corporation and the Issuer, as applicable. For the purpose
of this defmition an Auction Period of 35 days or less means a 35-day Auction Period or shorter Auction Period, i.e. a
35-day Auction Period which is extended because of a holiday would still be considered an Auction Period of 35 days
or less.
"Initial Period" means for any occurrence of an ARS Conversion Date, the period specified in a
supplement to the Authorizing Document.
"Initial Period Rate" means (a) for an Initial Period commencing on the date of initial delivery of the Bonds,
the rate set by the managing underwriter prior to delivery of the Bonds and (b) for an Initial Period commencing on an
ARS Conversion Date the lowest rate which, in the judgment of the Broker-Dealer, is necessary to enable the Bonds to
be remarketed at a price equal to the principal amount thereof, plus accrued interest, if any, on the ARS Conversion
Date. Such determination shall be conclusive and binding upon the Corporation, the Issuer, the Trustee, the Auction
Agent and the Bondholders. Not later than 5:00 p.m., New York City time, on the date of determination of the Initial
Period Rate, the Broker-Dealer shall notify the Trustee, the Borrower and the Auction Agent of the Initial Period Rate
by Electronic Means.
"Interest Payment Date" with respect to the Bonds bearing interest at an Auction Period Rate, includes the
first Interest Payment Date which shall be specified in a supplement to the Authorizing Document in the event of any
occurrence of an ARS Conversion Date.
"Issuer" means the County of New Hanover, North Carolina.
"Maximum Rate" means the lesser of (i) the highest interest rate that may be borne by the Bonds under
applicable State law, and (ii) 15% per annum.
"Person" has the meaning given to such term in the Authorizing Document.
"Submission Deadline" may be changed by providing for the substitution in the fourth line of "Issuer" for
"Corporation".
Auction Procedures
Determination of Auction Period Rate. The percentage of the Index in Section 2.04(c) is 65% for any Bond
the interest on which is not includable in gross income of the beneficial owner of such Bond for federal income tax
purposes and 75% for any Bond the interest on which is includable in gross income of the beneficial owner of such
Bond for federal income tax purposes.
Exhibit C
Form of Requisition
ITEM NO.
First-Citizens Bank & Trust Company
Raleigh, North Carolina
Dear Sirs:
On behalf of the County of New Hanover, North Carolina (the "County"), we hereby requisition from the
New Hanover County 2008 New Hanover Regional Medical Care Center Project Fund (the "Series 2008 Project
Fund") created by the Bond Order adopted on October 6, 1993, as amended by the First Supplemental Bond Order
adopted by the Board of Commissioners (the "Board") of the County on February 15, 1999 and the Second
Supplemental Bond Order adopted by the Board of the County on December 7, 2005 (collectively the "Bond
Order") and a Series Resolution adopted on October 20, 2008 (the "Series Resolution") by the County pursuant to
which you have been appointed to serve as trustee, the sum of
$ (excluding any sales tax) to be paid to for
We hereby certify that (a) such obligation in the above stated amount has been incurred in or about the
acquisition, construction or equipping of the Project, as defined in the Series Resolution, is currently due and
payable, and constitutes a proper charge against the Series 2008 Project Fund that has not been paid, (b) no notice of
any lien, right to lien or attachment upon, or claim affecting the right of the payee to receive payment of any such
amount has been filed or attached, or, if any notice of any such lien, right to lien, attachment, or claim has been
received, such lien, right to lien, attachment or claim has been satisfied or discharged, or that the same will be
satisfied or discharged, or that provisions (which, if applicable, are further specified below) have been made to
adequately protect you and the holders of the County of New Hanover, North Carolina Hospital Revenue Bonds
(New Hanover Regional Medical Center Project) Series 2008 from incurring any loss as a result of the same, and
(c) this requisition contains no items representing payment on account of any retainage to which the County or the
Corporation is entitled on this date.
This requisition shall be paid from the (Issuance Account) (Project Account) (as defined in the Series
Resolution) of the Project Fund.
County Representative
Corporation Representative
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(To be completed by County Representative and Corporation Representative and attached to
requisition when requisition is for obligations payable from Project Account)
CERTIFICATE OF COUNTY/CORPORATION REPRESENTATIVE
We hereby certify that the obligations covered by the above requisition do not represent
Issuance Costs as such term is defined in the Series Resolution.
County Representative
Corporation Representative
C-2